Most Chinese car companies assembling in Russia are illegal or in poor condition

Chinese car companies are being assembled in Russia and have been subjected to "blocking orders" or even more severe treatment

The dream of Chinese auto companies wanting to assemble cars in Russia was completely shattered. Shanghai Securities News learned yesterday that on September 15, the Russian authorities stopped approving foreign automobile companies to set up assembly plants in Russia. Before the introduction of the policy, US, European and Korean cars rushed to sign a $1.7 billion automobile assembly agreement. However, none of the Chinese auto companies' applications for assembly plants in Russia have been approved, and the assembly route to Russia in the future will be blocked.

Several foreign companies urgently started

The Russian Ministry of Economic Development and Trade will sign an order with the Ministry of Finance, Industry and Energy: Since September 15th, Russia will stop signing new foreign automobile assembly agreements, but companies that have signed an automobile assembly agreement before that date will take effect in the ban. After that, relevant agreements can still be signed.

In order to circumvent the September 15 deadline, several car manufacturers outside Russia signed a car-assembling protocol with the Russian government around the 14th. These automakers include General Motors of the United States, Ssangyong Motors of Korea, and Fiat Autos of Italy.

It is reported that General Motors and the Russian Ministry of Economic Affairs signed an agreement to spend 150 million U.S. dollars to build a new plant near St. Petersburg, with an initial annual production capacity of 25,000 vehicles and an annual production capacity of 120,000 vehicles. In the future, a new model of the Opel brand will be produced. Large-scale assembly will begin in 2008; the first quarter of 2009 will be assembled on a small scale.

The Fiat Auto Group also operates quite quickly. On September 12, Fiat Auto Group announced that it has signed an agreement with Russia's Severstal Automobile Factory. The two sides will hold a 50% shareholding joint venture to jointly produce, sell and market Fiat brand cars in Russia, with an annual assembly capacity of 50,000 vehicles. Its first model is the Fiat Linea, which is scheduled to start production in the first quarter of 2008.

Ssangyong Motor Co., Ltd. is building an assembly plant with a company in the Republic of Tatarstan. In addition, the Russian Ministry of Economic Development and Trade approved before September 15 that Mitsubishi Motors Japan and Hyundai Motor Korea will establish an investment agreement for auto assembly plants in Russia.

It is reported that Russia’s rapid introduction of the restrictive agreement was due to the difficult living environment of its domestic auto companies.

According to statistics from relevant Russian agencies: In the first half of this year, despite the significant increase in sales of Russian automobiles by 28.7% (including imported used cars), the number of vehicles sold reached 1.18 million. However, the sales of its domestic cars were only US$2.5 billion, which accounted for only 13% of the total sales. The rest are occupied by imported cars and assembled cars.

“The European, American, Japanese, and Korean companies that have entered the Russian market have basically all come in.” Yesterday, Zhu Jingcheng, chairman of Xibili Automobile Exports, pointed out: “There are only Chinese auto companies.”

Chinese car companies encounter resistance in Russia

Unlike foreign car companies that quickly settled in Russia, Chinese car companies have not been approved by the Russian authorities for approval.

“It was originally an automaker in Russia that sealed an assembly plant. People have already passed. The technology of Chinese auto companies comes from Europe, the United States, Japan, and South Korea. It is better to introduce partners directly from Europe, America, Japan, and South Korea. Why detour? What about China?” Some people close to the Russian authorities pointed out, “The ban has now come out.”

It is reported that the Chinese automotive companies that met the resistance were Hebei Great Wall, Geely Automobile, Zhongxing Automobile and Beijing Automotive Holdings. Hebei Great Wall Motor intends to establish an assembly plant in the Republic of Tatarstan; Geely Automobile and Zhongxing Automobile intend to cooperate with Ural Automobile to jointly produce engines and vehicles; Beijing Automotive Industry Holding Co., Ltd. plans to manufacture light-duty trucks in Ulyanovsk Region.

“This year, when I accompanied a Russian official to the Geely Automobile, the official made it clear that he would never approve Geely to build an assembly plant in Russia.” Zhu Jingcheng said, “But Geely Automobile did not realize the seriousness of the problem at all. The application for the establishment of an assembly plant resulted in the delay in the plan to export 20,000 vehicles."

After the Russian government has imposed a ban, Chinese auto companies will face more severe treatment.

"At present, except for Chery Automobile, most of the Chinese companies that assemble and produce cars in Russia are illegal." Zhu Jingcheng pointed out, "Only the Russian government has closed its eyes and one eye has become obliged to implement the relevant regulations in the future. The situation of Chinese auto companies is worrying."

Even Chery Automobile may face a crisis. It is understood that Russian automobile manufacturers are jointly signing a letter demanding the cancellation of Chery’s preferential treatment in the Russian SAR.

Before August, China's automobile production and sales boomed

According to monthly statistics released by the China Association of Automobile Manufacturers on the 11th, from January to August this year, the production and sales of domestically produced automobiles reached 5,751,600 and 5,685,300, an increase of 23.57% and 24.95% year-on-year, of which passenger vehicles produced and sold 4.0754 million and 4.0216 million vehicles. The year-on-year increase was 21.99% and 24.09%; the sales and sales of commercial vehicles were 1,676,200 and 1,663,700, an increase of 27.61% and 27.08% respectively.

From January to August, sales of the top ten auto manufacturers were: SAIC, FAW, Dongfeng, Chang'an, BAIC, GAC, Chery, Brilliance, Hafei, and Geely. Compared with the same period of last year, Hafei had a slight decline. Others The company still maintains stable growth, of which Guangzhou Automobile has the most obvious increase. From January to August, the above-mentioned ten companies sold a total of 4.735 million vehicles, accounting for 83.30% of the total sales of automobiles. (

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