Candidates for departure: car dealers have started to abandon Chinese brands
The number of dealers of Chinese brands Skywell, Livan and Kaiyi has decreased in Russia. Experts believe that some brands may leave the Russian market after the increase of the duty from January 1, 2025. The remaining ones will optimize the model range and introduce their products under new brands. Details - in the material "Izvestia".
Dealers are abandoning them
Since the end of last year in Russia there has been a gradual abandonment of Chinese brands with low sales volume, according to the analytical agency "Avtostat". Some dealerships have managed to change their signs twice, the agency's general director Sergey Tselikov told at the Autostat Analytic Day conference. Later in "Autostat" explained to "Izvestia" that so far this phenomenon is not of mass character. At the end of Q3, Kaiyi and Livan have nine and five fewer dealer contracts, respectively.
In the capital company "Dealon" told that the salon Skywell closed in early December and there are no cars left in stock. The St. Petersburg-based Kars Family said that they no longer deal with this brand.
"The cars are out of stock. The representative office doesn't know what it will do for the New Year," an employee of another Skywell dealership in St. Petersburg told Izvestia. In other Russian cities where the brand is represented, there are some cars left in stock, but of 2022 and 2023 model years. The 2024 cars have not been delivered to Russia, dealers interviewed by Izvestia say. The Skywell representative office did not answer Izvestia's questions at the time of delivery.
Factors of pressure on the market
After the next indexation of salvage tax from January 1, 2025, experts and market players predict a reduction in the number of brands on the Russian market. In addition to such already existing factors as the credit rate and utilization fee, at least two more initiatives are on the way, which may additionally severely restrict car imports, said Valery Tarakanov, Geely Russia Operations Director.
- These will be very serious levers. It could be the introduction of a vehicle identification system. It could be a revision of the definition of what a vehicle is. This may not affect the market volume as a whole, but radically change its structure. Less imports, more production in Russia," Tarakanov noted.
Low sales, low income, overabundance of models
Experts and market players also named Haima, SWM, Oting, Forthing, Venucia and Foton among the candidates "for departure".
Nikolay Ivanov, Director of New Car Department at Rolf, sees the main reason for the departure in low dealer profitability.
- Some brands may experience the collapse of the dealer network. I think, with high probability, it is Livan, Kaiyi, SWM, Foton. Dealers have stopped investing in these brands," Ivanov said.
The restraining factor for the development of Chinese brands with a minimal customer base is an overabundance of similar models on the market, says Alexander Shaprinsky, commercial director of the network of dealer centers "Pragmatica".
Thus, according to "Avtostat", with the mass arrival of Chinese brands and the cessation of supply of Japanese, European and South Korean cars, the market structure has changed: the share of SUVs has grown from 51% in 2021 to 68% in 2024.
Under pressure in the current situation will be small players with sales volumes of less than 3 thousand cars, believes the general director of the dealer holding "Avtodom" Andrey Olkhovsky.
In the risk zone
According to Avtostat-info, Kaiyi sold 7326 cars in the past 11 months, which is 8.8% more than in the same period last year. The lion's share is accounted for by the E5 sedan, popular in cabs - 5,591 cars. The X3 and X7 crossovers are selling poorly. Livan sold 3,510 cars, mostly the cheapest X3 Pro crossover.
Italian-Chinese brand SWM, which like Kaiyi is assembled at Kaliningrad's Avtotor, sold just 1,320 cars, mostly G01F crossovers. Forthing, which also has an assembly contract with Avtotor, sold only 465 cars in 11 months. The press service of Avtotor did not respond to Izvestia's inquiry about possible discontinuation of production of unpopular brands at the time of preparation of this article.
The British-Chinese brand MG is also in the risk group, even despite the fact that a rather large model range in Russia is represented by two companies at once. For 11 months, 443 MG cars were registered. Mostly it is the MG5 model, and in second place in popularity is the expensive electric roadster Cyberster.
"Oting Paladin" (in the statistics of "Avtostat-info" it passes also as DongFeng Paladin) from January to November sold 600 c small units. Skywell sales amounted to only 202 cars. For the last month of autumn dealers of the brand sold only eight crossovers, in some regions, for example, in Siberian and Ural Federal Districts, last month not a single car was registered. Haima sold only 54 cars, Venucia - 32. VGV sold 132 cars, but sales of crossovers of Belarusian assembly started only in September and the brand has not yet gained momentum.
Owners of cars, if their manufacturers leave the market, may be left without support, said Vice President of the National Automobile Union (NAC) Anton Shaparin.
- Some kind of support in the form of ordering spare parts from abroad is possible. Many brands still do not have centralized warehouses of spare parts. Dealers are not the main story here, although they may have software and repair technologies. If not many cars were sold, few third-party players will master this software and technology," Shaparin believes.
Some will leave, others will come
Presence on the Russian market depends not on the volume of sales, but on the company's policy, says Maxim Kadakov, editor-in-chief of Za Rulem.
- Ora electric cars come as a package of the whole Great Wall model range, which feels perfectly well in Russia and can spread risks, load and operating costs over the whole model range. It can "pull" electric cars further. Skywell sells few and is a candidate for departure. Also depends on how much support the company gets from China or from the government, regions. A lot of people are writing off all their losses. There are companies that produce 50 thousand cars a year in China. They don't care about sanctions, they are trying to export cars to the nearest country. They don't think about Britain or America. If they sell 5,000 cars here, it will be a victory for them. I don't rule out that we will have new brands. Some will leave and some will come," Kadakov noted.
Earlier, the South Korean manufacturer KGM, formerly SsangYong, as well as the Iranian IKCO announced their imminent entry into the Russian market.
They promise to stay
However, even despite not the highest sales volumes, car brands do not officially announce their departure from the Russian market. Moreover, Oting, FAW and BAIC announced plans to develop their model range in our country next year, and JAC plans to assemble cars in Russia together with Sollers.
- We will continue to develop Dongfeng/DFSK brands in the Russian market. Our dealer network amounts to 77 enterprises and continues to grow. We recently opened a new spare parts warehouse in Tomilino near Moscow, in addition to the existing one. We are also working on improving customer service and support to ensure the best experience of our vehicles," the press service of the Russian distributor DongFeng Motor told Izvestia.
The executive director of Livan Motors Rus, Kun Shuai, denied the possible departure of the Livan brand from the Russian market.
- There has never been Livan brand in the portfolio of Rolf Group. And we do not agree with the assessment of the work of the brand, with which we have no experience of interaction. As for the comment about our possible departure from the Russian market, we are confidently looking into the future in Russia. Our main goal now is dealer profitability, and our strategy for next year is based on this. Yes, our sales are small now, but the support of our headquarters and partners, reliability and quality of our vehicles give us the opportunity to stand on our feet confidently and strive for sustainable development," he said.
The press service of Ixen Motors excluded the possibility of Forthing and Venucia brands leaving the Russian market and told about plans to sell 10 thousand Forthing T5 EVO with all-wheel drive in 2025 and to increase the number of dealers up to sixty.
- During this year, we have achieved several strategic goals for the development of these brands' products. In particular, three Forthing models started to be assembled in Russia with a number of important adaptations. This allowed us to improve the competitive properties of our products by Russifying the multimedia system, expanding the package of warm options and reinforced suspension, - said the representative of the company.
Even the Jidu brand, currently experiencing serious financial difficulties, still plans to be present on the Russian market, Gazeta.ru reported. BorisHof, the company representing the Chinese electric car brand, said it was maintaining its original plans to launch and develop the brand in Russia.
"There will be a drop-off of low-margin cars"
Some companies will revise their model lineup, experts say.
- I think it is most likely that the models that turned out to be not very clear and at the same time expensive will go under the knife," Maxim Kadakov noted.
Igor Morzharetto, a partner of Avtostat, noted that the most serious competition has developed in the segment from two to four million rubles.
- There are a lot of "Chinese" and all the same. Low-margin cars will fall out of there. With this level of scrappage, they are very expensive. Therefore, they must somehow be assembled in Russia or go away, because you won't earn anything on such a car," he said.
So far, only Changan has announced the revision of the model range. We are talking about crossovers CS85 Plus, CS75 Plus of the second generation and CS95. At the same time, crossovers CS75 Plus and CS95 will be replaced by similar, but newer models. Cross-coupe CS85 Plus leaves the Russian market due to the end of the life cycle of the model. One more change is connected with renaming of CS55 Plus model into Uni-S in connection with separation of the series models into a separate line. Creation of new brands is becoming a trend among automakers represented in Russia. This is how companies seek to avoid possible sanctions.
"Artificial" hype and hybrids
The share of "artificial" brands created by both Russian manufacturers (Xcite, Amberauto) and Chinese manufacturers (Knewstar) will grow, according to Avtostat. The variety of brands and models supplied through alternative channels, on the contrary, will decrease.
- Last year, almost 40% of cars were imported through alternative imports. This year, everything was strangled to 23% due to "scrapping". I think that they will continue to strangle, maybe 15-20 percent of alternatives will remain. The rest is extremely difficult to import with such costs," said Sergei Tselikov, Director General of Avtostat.
According to him, the popularity of hybrids is growing. If last year more electric cars were sold than hybrids, now there are already twice as many as "electric cars", and next year he predicts a difference of 4-5 times.
Statistics show that Russians have fallen out of love with Tesla electric cars and have fallen in love with Chinese electric cars and hybrids. In 11 months, only 639 Tesla's have been registered, which is almost half as many as last year.
- We have a small layer of innovators trying the newest technologies. Tesla has not been a new technology for a long time," says Anton Shaparin.
For comparison, during the same period Chinese electric cars Zeekr sold 7,272 units, and hybrids Lixiang - 21,242 units. Russians bought 150 Xiaomi electric cars and 152 YangWang U8 hyper SUVs in 2024. All cars are supplied by alternative imports, which will gradually decrease.
- We somehow have ninety brands, including all sub-brands, with sales of less than one-tenth of the market share in our country. Anything less than one tenth of a share is at risk. We are talking primarily about cars that come here through parallel imports. Everything on the list of these brands is very strange, and it can all go away," says Igor Morzharetto.
Переведено сервисом «Яндекс Переводчик»
