Chinese automakers seek growth in Russian market

Recent stats show that sales of Chinese cars are picking up steam in Russia after years of sluggish growth.

Many are trying to expand their businesses in the Russian market as they believe economic recovery will generate more growth opportunities

A recent market report shows that Chinese car makers sold 19,000 vechiles in Russia from January to July this year, up 17 percent year on year. 

The report from Russia's "Automobile statistics" agency suggests Lifan Motors is among the best players, selling half of vehicles made by Chinese brands. 

Deputy manager of Lifan's Russian branch Wang Xiaolong said the brand's accumlative sales in Russia has exceeded 150,000. 

As part of its effort to localize production, Lifan established a wholly owned factory in Lipetsk in 2015, designed to produce 60,000 finished cars a year. 

Manager Wang added the company is trying to tap into the local car-sharing market.

"We jointly launched cars with our Russian partners. We are the first Chinese car company to enter the car sharing sector here and this is really helpful to raise the brand awareness in the market. Up till now, we have launched 600 cars in Moscow and each car is estimated to be used 5 to 6 hours per day. "

The electronics is being checked in the car shop of the holding company that sells Chinese cars and provides after sales service in Novosibirsk, Russia. [Photo: VCG]

Apart from car-sharing, Lifan has also established cooperation with taxi operators in Moscow and offered 2000 cars to the sector. 

Haval, a brand owned by Chinese car maker Great Wall, entered Russia in 2014 while the country's economic recession drove global automakers to quit.

Cheng Xiaoguang, manager of the Russian branch of Haval, said the company is upbeat about the prospect in the Russian market.

"At that time, some global brands like General Motors and Chevrolet withdrew from Russian market. On the contrary we entered into Russia. We believed there's a huge potential in Russian market and the crisis was temporary."

The manufacturer has invested 500 million US dollars in Tula to establish a finished car plant that is expected to start operation next year. 

Another Chinese carmaker Geely also sees the Russian market as an integral part in its global strategy. 

Zhan Shouhe, deputy manager of the Russian branch of Geely, says they aim to achieve success based on the quality of products and services. 

"We don't sell products with low costs which caused by low quality. Instead, we sell goods with premium quality with reasonable price. Our products sold in Russian are priced from 850 thousand Rubles to around 2million rubles. We offered a variety of choices for consumers. We want to establish good reputation of our brands."

Geely's 300-million-dollar plant in Belarus was opened last year and could produce 60,000 cars a year. Part of its products will be sold in Russia. 

In a brand-building move, Geely also unveiled a new SUV model in Moscow this February and vow to launch more brand new models in the future there with more comprehensive aftersale services.

Market analysis suggests Chinese brands are holding less than 2 percent of market shares in Russia, but have huge potential for growth.