Chery in Russia: Filling the Gap Left by Western Brands

Chinese automaker Chery has begun assembling vehicles in Russia, taking over production in three factories previously operated by Volkswagen, Mercedes, and Nissan. These factories had been vacated following the exodus of Western companies due to Russia’s invasion of Ukraine in 2022. Chery, which already accounts for nearly 20% of Russia’s passenger car market, is importing nearly complete cars and assembling them locally. This shift highlights China’s growing influence in Russia’s economy, particularly as Russia faces underutilized production capacity and weak domestic output.

In factories like St. Petersburg’s former Nissan plant, Chery’s Tiggo 7 SUV has been rebranded as the Xcite X-Cross 7, with production overseen by new Russian owners. Additionally, the Kaluga plant, which once belonged to Volkswagen, is now assembling Chery’s Tiggo models. The rebranded Xcite model won “best new brand” at a Russian SUV awards ceremony in September 2023, marking the successful entry of Chinese vehicles into Russia’s domestic market.

Chery’s “semi knocked down” (SKD) strategy, where nearly finished cars are sent for final assembly in Russian plants, is expected to continue, particularly as Russia raises tariffs on fully imported vehicles to encourage localized production. With Chery’s new models taking the spotlight and Chinese automakers filling the void, the shift represents a key moment in Russia’s changing automotive landscape post-Western sanctions. Chery has ambitious global expansion plans and aims to break into 60 new markets within three years, all while maintaining its growing Russian presence.

THINK LIKE AN ECONOMIST!

Q1. Define the term FDI.

Q2. Explain one reason why Western automakers left the Russian market.

Q3. Analyse how Chery’s entry into Russia might impact the local car manufacturing industry.

Q4. Discuss whether China’s expanding role in Russia’s economy is likely to be sustainable in the long term.

Click here for the source article

TheCuriousEconomist

Recent Posts

Sugar Tax Shake-Up: UK Plans to Target Milkshakes and Dairy Drinks

The UK government has launched a consultation to extend the soft drinks industry levy (SDIL)—commonly…

1 week ago

China’s Economy Grows 5.4% — But Can It Withstand Trump’s Tariff Tsunami?

China’s economy started 2025 with stronger-than-expected momentum, growing by 5.4% in Q1—comfortably above forecasts of…

3 weeks ago

U.K. Government Seizes Control of British Steel Plant

It’s a dramatic move—but one the U.K. government believes is essential for national economic security.…

3 weeks ago

U.S. Tariffs on China Surge Past 100% as Trump Escalates Trade War – but why?

A new chapter in the U.S.-China trade war is unfolding—and it’s one that economists fear…

4 weeks ago

Can Defense and Housing Turn the Tide on Sluggish GDP Growth in the UK?

The U.K. economy is still stuck in low gear. The Office for Budget Responsibility (OBR)…

1 month ago

PepsiCo Plans $1.95 Billion Poppi Acquisition

PepsiCo is planning to acquire prebiotic soda brand Poppi for $1.95 billion, marking a major…

2 months ago