Russian carmakers may take over China market

The head of "Sibir Auto Export Company in Beijing" (SAEC) Zhu Qingcheng is sure that Russia can be a strong competitor importing cars into the Chinese market, Optim Consult press release said.

The reason for concern of the largest Chinese producers and car exporting companies was the fact that the largest Russian companies increased the volume of spare parts purchase. "GAZ Group," the largest Russian automobile industry holding company, with its annual sales volume of over 6 billion dollars, purchased 2 million Chinese tires over the last few months. Along with "GAZ Group," Capital Auto wholesale company and some other Russian companies are trying to arrange the delivery of Chinese spare parts.

According to the head of the biggest Chinese B2B car portal Gasgoo.com Cheng WENGHAI, this circumstance is the evidence of Russian car producers' development and technology improvement. In his opinion, with the assistance of the government Russian car industry has a chance to enter international and Chinese markets.

Yevgeniy KOLESOV, the general manager of Optim Consult company, specializing in consulting services for Russian companies, noted that Chinese spare parts, as compared with Russian spare parts, are inexpensive and of better quality. "Chinese market attracts Russian companies. For many Russian companies cooperation with China is a great possibility to increase their manufacturing capacity without overpaying for brand."

Russian car industry is still under great pressure of foreign car manufacturers. About 70 percent of the cars sold in Russia in 2007 belong to overseas brands. The number of Russian cars of foreign assemblage was about 455,000. Experts predict that this number can increase up to 2 million by 2012.

Russian companies' interest in big purchases in China gives the Chinese experts a reason to suppose that Russian cars sales volume will increase up to 3 million by 2010. The head of SAEC Zhu Qingcheng thinks that these numbers will attract overseas companies that are ready to invest money in Russian car industry.

The Chinese experts recommend that this situation should be taken seriously, in spite of the fact that now it's hard to believe in quick development of Russian car industry. China suspects, however, that the assistance of the government can help Russian manufacturers to increase their capacity and not only to force Chinese cars out of Russian market but also to take over Chinese market.

Chinese customs agency statistics:

2007: China exported 3,785,319 kg of spare parts into Russia, export volume - 15,643,013 dollars.

2007: Russia exported 618 kg of spare parts into China, export volume – 5303 dollars.

2008 (January – October): China exported 4,044,636 kg of spare parts into Russia, export volume – 19,398,789 dollars.

2008 (January – October): Russia exported 1341 kg of spare parts into Russia, export volume – 14,542 dollars.