China Auto Manufacturer Considering Manufacturing Facility In Siberia and Russian Far East

A Chinese automaker is considering Novosibirsk and Irkutsk regions as possible locations for a plant, the chairman of the Russian-Asian Union of Industrialists and Entrepreneurs (RAUIE), Vitaly Mankevich has stated. He was speaking at the GlobalSibExpo-China 2024 Automobile Transport, Logistics and Engineering Forum in Novosibirsk.

Mankevich said that “The construction of a Chinese automobile company’s plant with [Russian state corporation] Rostec is now being discussed. Construction of the plant is expected to start in the second half of 2025 or the beginning of 2026.”

He also said the federal authorities and Russian businesses are interested in the construction of a hub to sell Chinese auto parts in Novosibirsk Region, saying that “Various goods will be shipped to Russia, including through Mongolia.”

The only Chinese automaker that is highly localized in Russia now is Great Wall, which manufactures Haval cars at its own plant in the Tula Region under a special investment contract with Russia’s Industry and Trade Ministry. The company recently announced plans to expand the plant’s capacity from 150,000 to 200,000 vehicles per year.

China’s auto industry strategy for entering the Russian market has been to manufacture kits in China, then assemble in Russia. Moscow now wants Chinese manufacturers to at least partially manufacture component parts in Russia.

In related market intelligence, Russian Railways (RZD) has proposed to build a distribution centre in Novosibirsk for automobiles imported from China. Kenan Abasov, the deputy head of RZD’s West Siberian Corporate Transport Services Centre said at the same GlobalSibExpo-China event that “Concerning China, we have a new idea to set up a distribution centre to ship in, and import automobiles. Dealers are opening up in Western Siberia, and more and more importers in the country are selling Chinese automobiles such as Chery and Geely. We’ve found some points of contact with them.”

He said automobiles from China now “go directly to Moscow,” but if a distribution centre is built in Novosibirsk it would also serve Kemerovo Region and Eastern Siberia. This would enable Russian automobile dealers to get vehicles faster and automakers to increase sales and reduce transport costs, Abasov said, adding that RZD would increase freight car turnover in this case. There are now ten Chery and Geely dealerships in Novosibirsk and Krasnoyarsk.

Russia’s domestic sales of new passenger cars and light commercial vehicles (LCV) surged 35% year-on-year to 155.3 million vehicles in 2024 January-August this year, according to the Russian Association of European Businesses (AEB), which monitors the auto industry in Russia. That implies an annual Russian new vehicle market of about 233 million vehicles.