Chinese car brands are changing the Russian market

Car manufacturers from China are successfully developing the Russian market. In 2023, their share in sales exceeded 50%, and residents of major metropolises are increasingly moving to Chinese electric cars and hybrids. However, in terms of brand recognition, they have a lot to work on: only three Chinese brands have come close to the level of knowledge of their competitors. These are the results of a joint study by ROMIR and OKS Labs (by Okkam). 

Over the last two years, the Russian automotive market has undergone a structural transformation: supply chains, players and consumer sentiment have changed. The new market reality is the search for a balance between fundamentally changed supply and demand.

According to OKS Labs forecasts, the Russian automotive market will continue to grow and may reach 1.8 million units by 2028 in the baseline scenario. The key drivers of growth will be subsidies for car manufacturers and car loans, localisation of Chinese manufacturers, expected reduction of the key rate and development of electric transport.

The current situation has turned into a window of opportunity for Chinese players, who have made successful bets on two key segments: relatively cheap cars and premium electric cars and hybrids.

While in 2021 there was only one Chinese car brand in the top 10 in terms of sales, by 2023 Chinese brands already occupied six out of ten places in the ranking. The share of Chinese brands in sales for the same period increased more than 7 times - from 7% to 51%. Apart from them, only Russian brands were able to increase their share (from 23% to 33%). In January 2024, Chinese electric cars and hybrids of Zeekr, Lixiang and Voyah brands were sold in quantities comparable to the top 4 global brands, excluding Russian and Chinese brands. 

Manufacturers from China are actively expanding their presence in the Russian market by localising production and adapting the model range, developing official dealer networks, and increasing marketing expenditures. In two years, the number of dealership centres managed by Chinese companies has increased from 713 to 2207, making them leaders in this indicator.

Serious ambitions are also evidenced by the fact that last year three Chinese car brands were among the top five in terms of advertising expenditure in their category. According to the study, the most recognisable brands are Chery, Haval and Geely, but they are only beginning to approach mass European, Korean and Russian brands in terms of spontaneous knowledge and knowledge with cues.

Currently, Chinese brands are perceived uniformly in the mass consciousness despite radical differences in model ranges. The study found that consumers do not differentiate even between premium brands such as Zeekr and Tank, categorising them as status mass brands such as Exceed, Geely and Haval.

The main barriers to buying Chinese brands are lack of long-term experience (39 per cent), lack of confidence in the long-term performance of official dealers (27 per cent), doubts about quality (26 per cent) and lack of demand in the aftermarket (25 per cent).

Nevertheless, despite the relatively low recognition of Chinese brands and the noted barriers to purchase, the sales statistics indicate significant demand and market adaptation to the inevitable changes.