Since the outbreak of the Russian-Ukrainian conflict, the form has been escalating. On March 15, 2022, the European Union launched a fourth round of sanctions against Russia, which includes a ban on the export of luxury goods and luxury cars to Russia.
On April 7, Dennis Manturov, Minister of Industry and Trade of the Russian Federation, said in an interview with reporters, "We have some Chinese brands, and we are discussing with these brands the possibility of replacing the original high-end brands." ”
In fact, domestic automobiles and Russia have always been closely related, a total of 58 kinds of car brands are sold in the Russian market, and domestic brands have been listed in Haval, Geely, Chery and Changan. Russia has even become Chery Automobile Group, the largest overseas export market.
Taking Chery Automobile as an example, in 2005, the first overseas subsidiary was established in Russia, and the development momentum has been long, and chery's sales and service outlets have covered important cities in Russia, and the local car ownership has exceeded the 200,000 mark.
So, can this Western sanction against Russia in turn become a major opportunity for China's automotive industry?
The rise of Chinese cars in Russia
In the early days, the era of "Chinese car" as a pejorative term in Russia is gone.
According to statistics from Avittotor, a local Russian car brand, Chinese cars sold 115,700 vehicles in Russia last year, compared with nearly 60,000 sales figures in 2020. Moreover, the proportion of domestic cars in the Russian auto market has exceeded 7.3% in January this year.
Domestic cars have such excellent performance in the Russian market, and are closely related to quality, appearance, cost performance, market attitude and so on.
From the perspective of the quality of the car, the quality of domestic cars in the past decade can be said to have made an essential leap, from the previous driving to 100 kilometers per hour began to "float", to now 120 to 130 kilometers per hour are full of power.
Of course, in addition to improving their own quality, domestic cars have not given up the "affordable" route, compared with the previous price has not increased too much, the quality and design sense has improved, everyone knows how to choose, right?
Not only in terms of performance, the appearance of Chinese cars is also more and more favored by consumers. Also ten years ago, independent domestic cars are not ugly? I believe that all the officials have feelings, and the change in the design perception alone is enough to give people an impact. From the earlier blind imitation of cottages, domestic cars have their own style and design sense, no wonder the Russian market is willing to pay.
Haval, Geely and Chery, as major domestic automakers, account for 80% of Chinese cars sold in the Russian auto market. Chery's sales growth rate has reached an incredible 224%.
In May 2015, for example, the domestic brand with the highest sales volume in Russia at that time was Lifan, which had a market share of less than 0.5%. In January 2022, the mainland's overall automobile exports reached 231,000 units, of which the market share in Russia also exceeded 7%.
Since 2015, the share of Chinese cars in the Russian market has almost maintained the "anti-heaven" data that doubles every year, so why can Chinese cars gain a foothold in Russia?
More than a decade ago, the "Chinese car" in Russia was equivalent to cheap and low quality. After this period of development and precipitation, although the "Chinese car" is still a "price butcher", but the quality and technology have been grasped, who bought not to say a word of "true incense"?
At present, the Tiggo 8 PLUS is a popular model in Russia, the guide price is 140,000, from the same configuration point of view, it is difficult to find a lower price model on the market. Overall, it's good and cheap, who wouldn't like it?
Which of the domestic cars can compete with European cars?
As a country with extreme cold weather, Russia's requirements for the "heart" of the car, the engine, are more demanding. Compared with now, the quality of all aspects of the first batch of Exported Chinese automobiles is indeed worrying.
The quality of parts and manufacturing processes of Chinese cars determines the stability of a car. In the early days, domestic automobile sales took the extensive "price war" route, limited by cost, and could only purchase goods from second- and third-tier small factories with slightly inferior quality. The overall quality of the product does not go up, and it is difficult for consumers to buy it.
In addition, most car companies' previous export models were "vehicle exports", which highlighted the problems of small investment scale, low localization and high transportation costs. Such a model will bring high management costs in the long run, and it is also not conducive to the original intention of sustainable development of automobile exports.
In recent years, the domestic car company brand has bloomed a hundred flowers and now vaguely formed the three giant models of Geely, the Great Wall and Changan Dingli. At present, the mainland's industrial system is the first in the world, and Chinese car companies are quietly starting a new round of reshuffle.
Compared with the "ancient" domestic car, no matter from the perspective of technology, technology and design, there is a technology that can be independent. Chery's engine head integrated exhaust manifold technology, for example, is very mature, which can ensure that in the cold of winter, the hot car time is greatly shortened, and the fuel consumption is also reduced when driving.
At present, the domestic automobile market is relatively weak, and the increasingly prominent problem is the problem of overcapacity in the automobile manufacturing industry, of course, the domestic industrial model is also constantly adjusting, and many car companies have upgraded their product exports to the height of the business strategy of enterprise development. The negotiation of the free trade zone agreement actively promoted at the national level has also empowered China's automobile exports.
At the same time, through the development of the mainland automobile industry in recent decades, the summary of experience, whether it is the quality of the product or the completeness of the service network coverage, is constantly being optimized. Today is different from the past, and Chinese cars are no longer the "Wuxia Amon" of the past.
In March 2010, Geely completed the earth-shattering acquisition of the "grasshopper shaking the tree", in order to complete this acquisition, Geely's head Li Shufu as early as 2004 put the five words of "acquisition of Volvo" deeply rooted in his own schedule.
Although everyone was not optimistic about the acquisition result, Li Shufu still completed this "impossible task" with his excellent layout ability and foresight. After taking volvo from Ford, Geely received 100% of volvo's equity, 100% of the intellectual property rights and the Volvo brand.
This merger is the first time that a domestic car company has acquired an international luxury car brand, and it has also rewritten the history of Chinese car companies without independent luxury brands and core technologies. This merger not only opened a new chapter for Geely, but also opened a new era in China's automotive industry.
The development of domestic car companies in the past decade has laid a product foundation for The export of Chinese cars to Russia, so which models in the domestic car can be called "luxury cars"? Not only there are, but there are many more! Models equipped with V6 engines alone include the Tank 500, Hongqi HS7, Hongqi BJ80 and so on.
Landing 100,000 yuan of "commuter cars" are everywhere, in addition to traditional fuel vehicles, mainland new energy vehicles have also experienced "blowout" development since 2020, in the first half of 2021, Russia sold a total of 12,600 electric vehicles, although the number is still small, but for mainland car companies, it is not a blue ocean.
Is the fourth round of sanctions an opportunity for Chinese cars?
Since the global outbreak of new crown pneumonia at the end of 2019, Russian President Vladimir Putin has repeatedly said in public that "this epidemic will be one of the great challenges in Russia's history", and its huge treatment costs have brought enough burdens to the medical system.
At the same time, it has also made the Russian economy, which has not been rich since the Syrian war, "worse", and the original oil revenue has been greatly reduced. Looking at the whole world, under the shadow of the "new crown", the only country that can continue to "engage in business" is probably us.
According to statistics from the China Association of Automobile Manufacturers, as of last month, domestic automobile exports in the first quarter increased by 28.8% year-on-year, of which new energy vehicles exported 120,000 units in the first quarter, an increase of 290% year-on-year.
Statistics from China's automotive industry in 2015 show that the production line of domestic car companies, the capacity utilization rate of commercial vehicles is only 52%, which means that the mainland automotive industry has serious overcapacity. The prominence of structural problems in the production capacity of car companies makes "going out" a necessary and urgent problem.
On the one hand, China's car exports can release production capacity, on the other hand, they can open up overseas markets and stimulate the potential of domestic brands. In fact, there is no successful car brand that only develops the domestic market. As early as 2005, Chery laid out its own production plant in Russia, and another "giant", Geely, also worked in Russia for many years.
At present, Chery Automobile's ownership in the Russian auto market has exceeded 200,000, and the brand has also won the "Most Popular Chinese Auto Brand" award issued by the Russian government for many times.
Avittotor predicted that this wave of "sanctions" in the West will "free up" 10 to 15% of the automobile market, and there is a sea of stars in front of it.
epilogue
The statistical results from Avittotor show that although the Russian auto market has gradually saturated and the pace of development has slowed down year by year in recent years, China's automobile sales have been steadily rising in the local area. From last year to this year, the overall number doubled, and then by January this year, the sales target of 10,000 units had been achieved.
Coupled with the impact of the "fourth round of sanctions" on the Russian auto market, large manufacturers such as Nissan and Toyota are facing the situation of being forced to close their production lines in Russia. The "withdrawal" of Western and Japanese and South Korean car companies will indeed make room for "Chinese cars". Chinese do things, pay the most attention to the time, location, people, external benefits have, this wave depends on whether domestic car companies can catch it. In short, opportunities always coexist with challenges!
Resources:
ZHANG Xiaoliang. How to make domestic cars travel all over the world[J]. Operators, 2019(4):3.
Ouyang Minggao. Development strategy and countermeasures of energy-saving and new energy vehicles in Mainland China[J]. Automotive Engineering, 2006, 28(4):317-321.