China assessed the risks of sanctions on the automotive industry due to cooperation with the Russian Federation

Chinese car manufacturers are facing increasing pressure to invest in production in Russia, which is increasing fees for exporting cars to the country. At the same time, companies from China react differently to the prospects of localizing car assembly in the Russian Federation, given possible sanctions from the West, the Chinese portal Autohome said in an analytical note.

Thus, Great Wall Motors is shifting its focus from the European market to China-friendly markets such as Brazil and Thailand, and increasing investments in Russia by increasing production capacity and deepening localization. If the company falls under sanctions, the export of Ora electric vehicles, which are produced in a joint venture with BMW and are being sold to different countries, will be at serious risk, the note says.

The Chery Automobile concern, preparing for an initial public offering on the Hong Kong Stock Exchange, is reducing its activities in Russia to reduce the risk of sanctions, Chinese experts say. It is indicated that for this reason, the company has already ceased operations in the Cuban and Iranian markets by the end of 2024.

"Geely, which has already firmly established itself in global markets thanks to its Volvo brand, seeks to avoid direct investments in Russia, which could lead to scrutiny or even sanctions. As long as exports, large—scale assembly (SKD) and the joint venture in Belarus remain profitable, Geely is likely to continue using these methods to serve the Russian market," Autohome also reports.

China's state-owned automakers, such as FAW, Dongfeng and JAC, may expand production by the large-node method (SKD) in Russia, however, increased investment in Russia may lead to sanctions and affect their joint ventures with Western automakers in China, the material says.

As for manufacturers of electric vehicles like BYD, due to the low demand for such cars in Russia, these companies are not entering the market and are unlikely to increase investments at the present time, Chinese experts say.

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Earlier in the day, it was reported that new car sales in Russia by the end of 2025 could be about 20% worse than in 2024. According to the analyst, about 1.25 million new cars will be sold in Russia this year, compared with 1.57 million passenger cars a year earlier.

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