According to insiders, Chinese car manufacturer Chery uses former factories of Western competitors in Russia to build its vehicles. The company assembles the cars in facilities operated by Volkswagen, Mercedes-Benz and Nissan before Russia’s attack on Ukraine, five people familiar with the process told Reuters.
The Tiggo SUV and vehicles from the Chery brand Exeed, among others, rolled off the assembly line.
Car manufacturers from China are not planning their own factories
Given the weak market in China, the largest Chinese exporter is likely to want to expand its Russian operations and take advantage of underutilized production capacities. Chery stated that it would supply the Russian market with vehicles. There are no plans to build or buy our own factories. The company did not respond to a question about assembly in the three former Western factories.
Chinese influence on the Russian economy is increasing
After Western carmakers withdrew from Russia, Chinese manufacturers took over more than half of the Russian car market. The fact that they are now also expanding production shows how Chinese influence on the Russian economy increased after the start of the war. The government in Moscow recently imposed import duties to encourage foreign automakers to build vehicles in Russia. According to documents obtained by Reuters from February to August, Chery has been approved to produce some models in Russia.
Chery records large sales growth
The former VW factory in Kaluga, south of Moscow, will be used, among other things, for the Tiggo, according to Mikhail Pogonov, who is responsible for Chery vehicles at car dealer ASC. Car sales are currently increasing significantly. “Sales growth is already over 100 percent,” he says. The Tiggo will be produced at the former Nissan plant in St. Petersburg under the brand name Xcite X-Cross, one of the insiders said. The Xcite brand was named ‘best new brand’ at the end of September. A Chinese car was launched under a Russian brand name as early as the end of 2022, when the Soviet brand Moskowitsch was revived by the Chinese manufacturer JAC, according to insiders.
One of the insiders said that Chery and the Russian government were interested in as little information as possible about production in Russia. A spokesman for Chery in Frankfurt said the Russian company had nothing to do with the European expansion plans. The Russian ministries involved did not respond to requests for comment.
The EU has introduced punitive tariffs on electric cars from China
Just last week, EU countries cleared the way for punitive tariffs on electric cars from China, which will come into effect at the end of October, but at the same time appeared open to a negotiated solution. The European Commission accuses China of lowering the price of vehicles through huge state subsidies and thus distorting the market. To avoid tariffs, some Chinese manufacturers plan to set up production in Europe, including Chery.
Source: Krone
I am Wallace Jones, an experienced journalist. I specialize in writing for the world section of Today Times Live. With over a decade of experience, I have developed an eye for detail when it comes to reporting on local and global stories. My passion lies in uncovering the truth through my investigative skills and creating thought-provoking content that resonates with readers worldwide.
