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The international community has condemned the Russian attack on Ukraine and called for the withdrawal of Russia’s troops. China abstained from the historic vote at the emergency session of the United Nations General Assembly on Wednesday. The resolution fails to take the “the history and complexity of the current crisis” into account, Chinese UN Ambassador Zhang Jun said after the vote. Moreover, it did not express the urgency of a political settlement or considers the security concerns of all states involved, the ambassador said. However, China was willing to “continue to play a constructive role.” China’s abstention – along with 34 other states – is no surprise. Beijing has been trying a shaky balancing act of economic and political interests in the conflict for the past week.
Russia’s increasing isolation by the West could give Chinese car manufacturers a boost. Cars from the People’s Republic have already gained popularity in Russia in recent years. Chinese manufacturers already hold a larger market share over their Russian competitors. And the withdrawal of Western companies could now open up even larger gaps for brands like Chery and Haval, as Finn Mayer-Kuckuk analyzes. This is because Russia, unlike China, has never had a strategy of acquiring the know-how itself. In the end, the country could even become a satellite of China’s automotive sector.
China already dominates large parts of another market: Chinese smartphone brands dominate in India. However, almost all locally sold Chinese smartphones are produced in India, as Frank Sieren reports. The market share of domestic brands is shrinking dramatically in the process. However, the growing interconnection of technology could help ease the political tensions between the two nations.
Is Russia’s car market soon in Chinese hands?
Before the invasion of Ukraine, things were going very well for Chinese car manufacturers on the Russian market. Their most recent market share was at 7.5 percent. That is still far behind the Europeans, Koreans and Japanese. But it marks a doubling compared to 2020, and it is significantly more than the share of Russian competitors. The latter only had a share of 5.3 percent in their own country. “Perception of Chinese brands has fundamentally changed,” independent auto analyst Sergei Burgasliyev told the portal Yicai. Quality and design have advanced to world-class level in recent years. The Chery brand has enjoyed particular success in Russia recently, followed by Great Wall, Geely, Changan and FAW. EVs are also considered a future growth market for Chinese suppliers in Russia.
This development gains particular significance as a result of the Ukraine war. This is because Western car companies have begun to withdraw from the Russian market. BMW has stopped all exports and expects disruptions in local manufacturing. Volvo and GM have also suspended shipments to Russia. Daimler Trucks has terminated its cooperation with Russian truck manufacturer Kamaz. Volkswagen blocks shipments of finished cars. However, the company continues to operate its Russian factories. Toyota, which has stopped the assembly lines, is different. Its plants are already suffering from a shortage of parts that normally come from international suppliers.
Local production is less sophisticated. Complex technical components are imported from other countries. Cars are often merely screwed together in Russia. “The technology is located in Europe or China,” says Ferdinand Dudenhoeffer of the Center Automotive Research in Germany. Even the old Lada brand is now majority-owned by the Renault Group and technically dependent on it. Russia never had a strategy like China of acquiring the know-how itself.
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