On April 3, 2025, a strategically important conference "Russia & China: How to Build Long-Term and Mutually Beneficial Relations" was held, dedicated to important topics of interaction between the Russian and Chinese car markets

The purpose of the conference was not only to talk about pains and statistics, but also to find real solutions and proposals to improve cooperation between Russia and China. The event brought together more than 300 participants from all over Russia and China. The meeting was initiated by the Russian-Asian Union of Industrialists and Entrepreneurs (RAUIE) and the Ministry of Industry and Trade of the Russian Federation, with the support of the Chinese Embassy, InsightHub and leading industry associations.

Source: https://dzen.ru/a/Z_aPic19_AE39K-M

We thank the strategic partners who supported our meeting: CarCraft, Zetta Insurance, Remind insurance broker, ELT-POISK JSC, A24 and ENERGOGARANT.

The meeting was held with the active support of media partners and was covered in the leading industry media.

More than 14 speakers shared their experience, who presented the vision of the state, car dealers and distributors.

Speakers of the event — leading experts in the field of automotive production — shared practical solutions, problems and expressed their position on the localization of Chinese brands in Russia.

Strategic partnership in the automotive sector

Over the past three years, Chinese automakers have significantly strengthened their position in the Russian market. Plenipotentiary Minister of the Embassy of the People's Republic of China in the Russian Federation, Mr. Liu Jun, emphasizes that cooperation has reached a new level - the trade turnover has reached a record $240 billion. At the same time, Sun Bohui, President of Zhentong International Corporation, drew attention to the decline in supplies in early 2025, linking this to increased customs barriers.

Victor Zvagelsky, Deputy Chairman of the Russian-Chinese Committee of Friendship, Peace and Development, as well as President of the Association of Chinese Automobile Manufacturers, spoke in detail about the problems with localization. It is important to adapt production to Russian conditions and, if necessary, repurpose idle plants.

According to Viktor Zvagelsky, special attention needs to be paid to improving the regulatory framework. It is necessary to revise the policy of the utilization fee and simplify customs procedures. Sun Bohui spoke about the same thing, linking the decline in supplies in early 2025 with increased customs barriers.

Cooperation between Russia and China in the automotive sector has significant potential. Vitaly Mankevich — The Chairman of the Russian Union of Industrialists and Entrepreneurs believes that the development of joint ventures and work on electric vehicles will bring the partnership to a new level.

(Liu Jun, Minister Plenipotentiary of the Embassy of the People's Republic of China (PRC) in the Russian Federation and Sun Bohui, President of Zhentong International Corporation)

Position of the state

Nikolay Evgenievich Schmidt — Director for Marketing and Commerce of FSUE NAMI — spoke on the topic "Localization of the production of auto components and vehicles, as well as opportunities for support from FSUE NAMI." He presented a plan to achieve an 80% level of localization of production by 2035, and also explained the mechanism of special investment contracts and stressed the importance of Russian control over intellectual property. Nikolay Evgenievich shared information on the localization assessment system for Resolution 719, announced the required number of points for deeper localization for different types of cars.

In continuation of the position of the state, Tadevosyan Karen Samvelovich – Head of the Department of State Supervision and Control of the Department of Metrology, State Control and Supervision of the Federal Agency for Technical Regulation and Metrology – on the topic "Ensuring the Structural Safety of Vehicles". Rosstandart exercises Federal State Control over vehicles and components of vehicles and chassis in circulation, that is, before the start of their operation, maintains the relevant registers within the framework of the technical regulations of the Customs Union on the safety of wheeled vehicles, approves documents on conformity assessment.

Karen Tadevosyan outlined the main problem - the non-compliance of products with a certified sample: vehicles are certified according to the gold sample, but during production and deliveries, the products do not correspond to this sample. Cases of the use of non-certified auto components that replace the components declared in the type approval were also identified.

Among the main reasons were the following:

• Manufacturers try to hide the shortcomings of their products;
• Violation of the rules of operation, and so on.

Nevertheless, he is willing to cooperate and has proposed the following solutions:

• Strengthening product quality control at the production stage;
• Avoid circumvention attempts;
• Carrying out corrective measures and so on.

At the end of his speech, Karen Tadevosyan is open to communication and ready to help in solving such problems!

(Vitaly Mankevich – Chairman of the RAUIE and Karen Tadevosyan – Head of the Department of State Supervision and Control of the Department of Metrology, State Control and Supervision of the Federal Agency for Technical Regulation and Metrology)

About Chinese cars: key trends and prospects

Sergey Udalov, Executive Director of Autostat, presented a comprehensive analysis of the situation of Chinese automakers in Russia. His speech covered the current situation in the market, the specifics of demand in the regions and the prospects for cooperation.

Chinese brands are showing steady growth in the Russian market. At the end of 2024, they occupied 61% of the segment of medium and heavy commercial vehicles. Their dominance is especially noticeable in the SUV-C category, where the share reached 88% with total sales of about 400 thousand units. The most pronounced concentration is in Moscow and the Moscow region - 314 thousand cars were sold here, and the share of Chinese brands was 70%. Similar figures are observed in St. Petersburg and the Krasnodar Territory, where Chinese manufacturers control 65-70% of the market.

The pricing policy of Chinese brands also strengthens their position. The average cost of new Chinese-made cars exceeded the market average, amounting to 3.5 million rubles against 3.12 million, while models such as Haval Jolion retain premium status without losing customer demand.

However, there are also significant problems in the market. The most pressing issues remain the provision of spare parts - their shortage leads to long repair periods comparable to European premium brands. The service infrastructure is also poorly developed and requires urgent development.

Sergey Udalov expects the market to shrink by 10-20%, noting that the expansion of dealer networks (already numbering 4,400 centers across the country) and the localization of supplies remain key growth factors.

"The market is open to Chinese manufacturers, but the competition is already high," the speaker emphasized. "Those who rely on the quality of service and customer experience will remain among the leaders."

According to the expert, the successful development of Chinese brands in Russia will require improved logistics of spare parts, adaptation of the model range to regional features and consistent investment in marketing strategies.

Then he spoke Kirill Yakimishen, Deputy General Director of Zetta Insurance Group, who presented an analysis of the state of the insurance market in the context of the growing popularity of Chinese cars.

According to Zetta Insurance, the Russian insurance market is showing record dynamics, in 2024 it increased by 63%, to 3.7 trillion rubles, outpacing the growth of nominal GDP. The key driver of the market was the life insurance segment, and in non-life insurance, the main growth fell on the engine, VHI and corporate types. Premiums in auto insurance accounted for 40% of the total volume of the "non-life" business and reached 0.7 billion rubles. However, 2025 may become quite difficult for the Russian car market due to changes in credit policy and the economic situation.

An important role is played by the rapid growth of the share of Chinese cars in the structure of insurance premiums. In the first quarter of 2025, it became dominant, practically displacing other brands. At the same time, Chinese brands already occupy about 15% of the used car market, showing steady positive dynamics.

Kirill Yakimishen dispelled one of the most common myths. Chinese cars do not lose value faster than others, on the contrary, they show better insurance renewal statistics after loan repayment compared to even Korean counterparts.

However, the expert also identified serious problems. The shortage of spare parts for Chinese cars, although contained by manufacturers, is still a big problem. Even more alarming is the indicator of the average repair period, which for Chinese brands is equal to the indicators of German premium brands, whose imports to Russia are now limited.

"A serious challenge will be the return of Korean and Japanese manufacturers to the market," Yakimishen said. "Their well-established logistics and well-established warehouse networks can significantly affect the competitive balance."

In conclusion, the speaker stressed that insurance companies are ready to work with Chinese brands, but for sustainable development it is necessary:

• Creating an efficient spare parts supply system
• Development of electronic catalogs
• Reduction of repair time
• Optimization of the cost of insurance products

"Russian consumers are actively switching to Chinese cars, and this trend will continue," Kirill Yakimishen summed up. "But long-term success depends on how quickly manufacturers can solve current aftermarket problems."

General Director of the analytical company "Index" Vitaliy Kravets spoke about the current state of the aftermarket sector, paying special attention to the challenges for Chinese automakers.

The Russian car service market reached 1.54 trillion rubles in 2024, showing steady growth. At the same time, the structure of the market has undergone significant changes: 56% of services are provided by official service centers, 30% are the installation of spare parts purchased by customers themselves, and 13% are completely self-repairs.

Kravets identified several key trends shaping the modern aftermarket landscape:

• Rapid growth in online sales of auto components through marketplaces
• Gradual aging of the car fleet - more than half of the cars have exceeded the age of 10 years
• Reduced customer loyalty to authorized dealers after the warranty period expires

Particular attention was paid to the specific problems faced by Russian dealers:

• Severe shortage of skilled technicians
• Lack of comprehensive electronic spare parts catalogs
• Inflated expectations of Russian consumers regarding the level of service from Chinese brands

"The modern Russian consumer has become much more demanding," Kravets emphasized. "At the same time, 67% of car owners already have experience in operating Chinese cars, while 57% of the remaining third categorically refuse to consider them as an option for purchase."

The expert proposed specific measures to strengthen the position of Chinese brands in the Russian market:

• Development of a network of multi-brand service centers
• Creation of comprehensive electronic catalogs of spare parts
• Implementation of loyalty programs for customers after the end of the warranty period
• Adaptation of the pricing policy for spare parts and service

Then they took the floor Armen Gyulumyan (Remind Insurance Broker) and Anna Shishkina (ELT-POISK JSC). The speakers spoke about an innovative approach to the integration of insurance and financial services for the auto business.

Modern technologies have already radically changed the car insurance market. The platform, developed by Remind and ELT Poisk, allows you to reduce the time for issuing an insurance policy from the usual hour to 1 minute, and the loan approval process takes no more than 5 minutes. This breakthrough was made possible by the deep integration of all financial products into a single digital ecosystem.

According to the speakers, more than 50% of all cars in Russia are already insured through the ELT Search system, while the platform demonstrates an impressive approval rate of 58% against the market average of 50%.

In 2025, the key problem for Chinese manufacturers will be the lack of ready-made solutions for cars with expired warranties

Armen Gyulumyan, Marketing Director of the Remind insurance broker, noted: "We are witnessing a paradoxical situation: Chinese brands have massively entered the Russian market, but have not prepared the infrastructure to support the sale of used cars." In response to this challenge, the Remind broker offers the creation of certified car programs and extended warranties at the brand level, which can be deployed to the entire dealer network.

Anna Shishkina spoke in detail about the technological capabilities of the platform, which has already been integrated with 16 partner banks. The system provides not only instant registration of financial products, but also offers dealers powerful analytical tools for working with customers. Particular emphasis was placed on data security – all operations are carried out through secure communication channels with strict access control.

(Anna Shishkina — Director of the Sales Department of ELT-POISK JSC, Armen Gyulumyan — Director of Marketing and Communications of Resmind Insurance Broker)

An important advantage of the Remind and ELT Search platform is its impact on customer loyalty. For example, statistics show that 90% of car owners who received high-quality service when settling an insured event return to the same dealer to renew the policy for another year.

"Today, success in the car market is determined not only by the quality of cars, but also by the completeness of related services," the speakers concluded. "By combining insurance products, credit support and digital technologies, we have created an ecosystem that brings real benefits to all market participants."

Olga Selezneva, Chairman of the Association of Independent Services RAPO, Deputy Chairman of the OPORA RUSSIA Committee for Development in the Automotive Business presented an expert assessment of the state of the post-warranty service and personnel training market for Chinese automakers.

More than 40 Western brands have left Russia, only Chinese manufacturers have been able to fill the vacuum, but the service infrastructure lags behind the pace of sales.

The car service market today is divided:

• 5% Authorized Dealerships
• 45% certified independent stations
• 50% is a "shadow" sector that raises serious quality concerns.

The staffing crisis of qualified specialists is also alarming.

Young specialists come to the industry without basic skills, waiting for ready-made instructions for maintenance and technical maintenance, while modern cars require an analytical and systematic approach.

For more than 5 years, the RASTO Association has been implementing an author's training program for specialists for service stations. Together with Chinese partners, we opened a new direction - the maintenance of electric vehicles, thanks to the new knowledge and skills gained in Shanghai on the basis of Polytechnic University.

Key problems for the Russian car market:

• Lack of complete technical documentation in Russian
• Shortage of original spare parts and difficulties with their identification
• Non-adaptation of some design solutions to Russian conditions
• Lack of uniform standards for post-warranty service

Industry associations are ready to be a bridge between Chinese manufacturers and Russian consumers, but for this it is necessary to establish systematic interaction in training specialists and providing technical support.

Case in point: "When we disassemble an engine, we often see that the failure is not caused by a mechanic's error, but by a violation of maintenance regulations. Without feedback from the manufacturer, we cannot eliminate such systemic problems and stop consumer extremism."

Today we offer a three-stage cooperation program:

• Establishment of joint training centers for personnel training;
• Development of adapted technical manuals;
• Formation of an expert council to analyze typical failures.

Chinese cars have won the trust of Russian buyers, but now it is important to win the trust of Russian car services, we are ready for a direct dialogue with automakers from China.

Olga Selezneva – Chairman of the Association "RASTO"

Sergey Naumovsky, a representative of the ROAD Association, analyzed the position of Chinese automakers in the Russian market. In his speech, he noted the key achievements and systemic problems of the industry.

After the departure of 45 international brands in 2022, Chinese manufacturers have occupied the vacant niche, especially in the segment of cars priced from 2 million rubles. However, the current situation is characterized by an excessive number of players - about 65 Chinese brands are represented on the Russian market. This is much more than in the United States, but there is a significantly lower sales volume.

The average Chinese brand in Russia performs only 1.23% of the sales of the average brand in the United States. This situation creates risks for the stability of the market.

Sergey gave several examples of mistakes in the marketing strategies of Chinese brands:

• Chery has placed more than 30 dealerships in Moscow alone.
• Many manufacturers create an excessive number of sub-brands
• There is no clear positioning of different brands
• Historical experience shows that an excessive number of brands on one platform can lead to negative consequences, as happened with Mercury Motors or Plymouth.
• The main problems of after-sales service:
• Shortage of spare parts for many brands
• Lack of diagnostic equipment at dealers
• Incomplete or poorly translated technical manuals
• Insufficient level of staff training

The optimal for the Russian market would be 20-25 Chinese brandswho are ready to invest in a long-term presence and provide full service support. Chinese automakers need to move from quantitative growth to qualitative development.

Sergey Naumovsky — Representative of the ROAD Association

Boris Dmitriev, Chairman of the Board of Directors of CARCRAFT GROUP, presented an analysis of the current state of the corporate financing market for the automotive business in Russia.

In 2024-25, there are significant changes in market conditions. The key rate of 25% per annum and the increase in the sales time of cars to 50-70 days create great pressure on dealer networks. The annual reports of companies for 2024 are also of concern, they show the deterioration of many parts of the market.

The main prerequisites for the crisis:

• Tightening of the Central Bank's requirements for banks in the fall of 2023
• Rising Funding Costs
• Increase in cash gaps in transactions

Too long delivery times are also a problem. Delivery of cars to dealerships is sometimes delayed for up to 120 days, which leads to the fact that dealers begin to suffer losses even before receiving the goods.

Boris Dmitriev draws attention to the need to revise the policy of Chinese brands regarding compensations. In some cases, delays can reach 6 months, which creates an additional financial burden.

Now dealer networks can be divided into two groups:

• Large and stable companies with capital sufficient for at least a year of operation
• Smaller players experiencing serious financial difficulties

"We are seeing a growing interest in M&A transactions in the car market," Dmitriev concluded. "At the same time, the ability to adapt to new financial realities remains a key factor for success."

Boris Dmitriev — Chairman of the Board of Directors of CARCRAFT GROUP

Round table of Russian dealers: what are the main problems of the market?

Next, a round table begins in the program, within the framework of which the following market issues were revealed:

• What are the main problems when working with Chinese distributors?
• Advantages of working with individual brands, due to what?
• What is the prospect in the near future - quarter, year 2025: in terms of sales, in the forecast for 2-3 years ahead. Why?
• Offers from dealers to change the situation in the market.
• Participants discussed the need for a law on car dealers and market regulation, as well as ways to solve current problems.

The round table was opened by Oleg Moiseev, auto expert and ex-president of ROAD, who has been working in the auto business since 2005. Oleg acted as a moderator of the round table and he began with an important question for experts - "What are the main problems when working with Chinese distributors?".

The first to answer the question Anna Boyarshinova — General Director of VERRA, the company operates in the market of the Perm Territory and the Republic of Bashkortostan, has 16 brands and 5 sub-brands in its portfolio. Anna believes that the first main problem is the excessive number of dealerships. This leads to a decrease in average car sales per dealer and reduces the profitability and attractiveness of such a business. Anna proposed the following solutions to this problem:

● Assemble a specialized committee that will develop uniform rules, methodology and approaches for the development of dealer networks. The committee will include market leaders;

● Organize open tenders for the selection of new dealers with clear and transparent selection criteria;

● Weigh the need to open a new dealer if the existing one has closed, and so on.

The second problem that Anna highlighted is the quality of cars. Oleg fully supports Anna and believes that it is important to initiate regulatory changes so that the manufacturer is primarily responsible for the quality of products. She noted that the high percentage of warranty repairs for some brands has a negative impact on both their reputation and the image of dealers, which ultimately affects the client's choice.

The participants are confident that the joint work of manufacturers, dealers and authorities will change approaches to work in the industry and contribute to the growth of the popularity of Chinese brands in the Russian market.

Oleg asked Sergey Pletnev, Director of After-Sales Service at Avtodom: "Is it necessary to limit the number of brands through localization and increasing scrap to huge values?"

Sergey, answering the question, continued the topic of after-sales service. After the work of brands from unfriendly countries, customers of our country expect the highest level of service from the dealer, which poses huge challenges to Chinese colleagues in terms of finalizing the system and process of after-sales service of cars.

In turn, he highlighted the problem with the residual value of cars and the excessive profitability of some Chinese brands in 2023.

Valery Volodchenko — The CEO of Nizhegorodets, in turn, highlighted the problem with the residual value of cars and the excessive profitability of some Chinese brands in 2023. He shared that he interviewed 27 top managers of Chinese distributors and only two of them said that they were satisfied with their work, the main reason they indicated was discommunication with the headquarters in China and absolute distrust of management in Russia.

From left to right: Sergey Pletnev – Director of After-Sales Service at Avtodom, Anna Boyarshinova – General Director of VERRA, Vitaly Kiselev – General Director of RUMOS-Comtrans, Valery Volodchenko – General Director of Nizhegorodets

Vitaly Kiselev — The General Director of RUMOS-Comtrans shared the problems of commercial vehicles, which are actually similar to the problems of passenger cars — the presence of several distributors of the same brand in one city, as well as the high cost of transported goods, makes the problems even more critical.

Colleagues also noted the fact that the warranty period of the car is about 90 days and employees simply do not have time to sell the car on time, this undoubtedly affects labor productivity.

At the end of the discussion, the participants drew the attention of the Chinese colleagues to the fact that they are saying all this with a call for full understanding and mutually beneficial cooperation, and it is also in their interests to establish relations and competent supply of cars.

From left to right: Oleg Moseev — auto expert, Sergey Pletnev — Director of After-Sales Service of Avtodom, Anna Boyarshinova — General Director of VERRA, Vitaly Kiselev — General Director of RUMOS-Comtrans, Valery Volodchenko — General Director of Nizhegorodets

Main solutions and brand localization in the Russian market

After the end of the discussion of the open table, the general director of A24 made his speech - Denis Shubin.

He spoke about the A24 company, which has been operating on the market for 25 years and provides evacuation services, and also has its own fleet of equipment.

Denis noted the following advantages of this company:

• Do not outsource;
• Provide unique services;
• Work with electric vehicles;
• Adapting to the growth of auto tourism in Russia, and so on

This is what helps a company stand out from competitors and gain the trust of the audience.

At the end of his speech, Denis invites manufacturers and distributors to discuss the creation of service packages for their customers.

The next speaker was Li Feng – Development Director of GREENWOOD. He noted that the Greenwood company is part of the Chen Tong group and is the largest community in Crimea. The area of the territory is more than 140 thousand kilometers and 15 buildings for various purposes.

Li Feng also shared information about the annual trade turnover, which reaches 6 billion dollars, which reflects the company's undoubted success in this direction.

He also refers to the history of the company's development, since 2010 a platform for B2B interaction has been created. Li Feng also notes that the state fully supports the activities of the greenwood company and calls on everyone to mutually beneficial cooperation.

The next speaker was Anastasia Amelchenko – Leading Specialist-Expert on International and Economic Issues of the Plenipotentiary Representation of the Republic of Tatarstan in the Russian Federation

She spoke on the topic "Measures and opportunities for regional support of Chinese automakers in the Republic of Tatarstan"

Anastasia claims that Kazakhstan has achieved significant indicators over the past period of working with St. Petersburg products and shared statistics.

Anastasia said that one of the main and largest special economic markets of Tatarstan is Alabaka, it is an important production and technological component.

Also touching on the topic of finance, she said that the income tax is usually 2%, however, Anastasia claims that by 55 the tax will be 15.5%.

Due to the rapid development, she highlighted a number of opportunities for Tatarstan:

• Availability of tourist routes between Russia and China;
• Development of unmanned devices;
• Industrial development;
• Availability of new investments and others.

Anastasia believes that the main vector and main goals of development are to support enterprises through the Industrial Development Fund and increase the competitiveness of the location of enterprises.

The presentation ended with Anastasia sharing information that this is a great localization opportunity for Chinese brands.

Then the commercial director of Haval came out with his word - Liu Yajie. He shared information that by 2024, sales of Haval cars have exceeded 240 thousand units, which is a significant success for the company. That is why the brand ranks second among automakers in Russia in terms of sales. As the main reason for such success, Liu Yajie highlighted that the company has implemented localization in several stages, which makes it possible to produce cars taking into account Russian characteristics. He also claims that the company pays significant attention to the percentage of satisfaction of Russian customers.

If we turn to statistics, then, according to Liu Yajie, a network of 300 special services and 60 technical centers for car maintenance has been created. Referring also to the comments of colleagues about the shortage of auto parts, he said that at this point in time, a large stock of spare parts has been accumulated, about 30 thousand items.

Conclusion and Next Steps

At the end of the event, one of the main initiators of the conference — Vitaly Mankevich – Chairman of the Russian Union of Industrialists and Entrepreneurs. He summed up the results of the meeting:

Difficulties in the interaction of the two sides (Russian and Chinese) were heard, and it was also decided to send a collective letter to the Presidential Administration, which would set out all the problems that were discussed today. It is necessary to develop regulations for interaction between Chinese brands and Russian dealers in order to avoid a crisis in the future. Vitaly also assured the participants of the full understanding and support in solving all problems from the state.

Vitaliy Mankevich — Chairman of the Russian Union of Industrialists and Entrepreneurs

Summing up the results of the conference, it is worth noting that many problems and difficulties were voiced in the framework of interaction and cooperation with the Chinese car market, however, many solutions were also proposed. The Russian car market is always open to cooperation and transparency in the framework of interaction with the Chinese market!

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