Chinese car brands such as Haval, Chery and Geely Auto are suffering under Putin's new taxes in Russia. Sales are falling drastically, and even big discounts cannot stop the decline.
Russian car sales are currently plummeting. Sales fell by a whopping 46 percent in March compared to the previous year.
Chinese car brands such as Haval, Chery and Geely Auto are clearly feeling the pressure from Putin's new taxes and a weakened market.
The decline is clearly visible throughout the first quarter of the year, with sales falling by 26 percent overall.
Wards Auto writes.
Only 254,000 new cars were sold across Russia in the first three months of 2025.
There are several reasons for the negative development in car sales. Extremely high interest rates on car loans make financing difficult for many Russians.
The general purchasing power of the population has also dropped significantly. In addition, many Russians are furious that they officially only have Chinese car brands to choose from, since Western brands fled the country after the attack on Ukraine.
Putin's new punitive tariffs on imported cars also play a big role. It hits Chinese brands especially hard, as they primarily sell imported cars or cars built under license in otherwise abandoned factories.
The new tax has made foreign cars more expensive.
Some Russian car buyers are also holding off on buying new cars. They are speculating about whether there is a prospect of military peace in Ukraine.
This could mean that Western car brands will return to the Russian market. Renault, for example, has pre-emptive rights to Lada for a period of two more years.
Putin's new tax hits Chinese car brands
This is bad news for Chinese automakers. Brands such as Haval, Chery and Geely Auto enjoyed strong growth in Russia until last year. They quickly took over market share as Western brands disappeared.
Almost all Western automakers chose to boycott Russia in response to the country's attack on Ukraine over three years ago.
The Chinese car brands, on the other hand, chose to stay in Russia. In this way, many of the revived Soviet-era car brands are actually built on Chinese technology today.
But at the end of last year, Putin introduced a very high import tax. The tax applies specifically to imported cars. This has changed the competitive situation significantly in a short time.
A small imported car now incurs a fee of approximately 70,000 Danish kroner. A larger imported car costs around 200,000 Danish kroner extra in the new fee. This makes imported cars significantly more expensive for Russian consumers.
The new fees have given an advantage to domestic carmaker Lada, whose market share has increased from 28 percent to 31 percent.
This is despite the fact that the overall market has fallen sharply and that Lada – or rather the parent company AvtoVAZ – has to manage without Renault.
Chinese brands are being pressured with discounts and accusations
Geely Auto is a concrete example of the decline of Chinese brands. Geely has the same main owner as Swedish Volvo Cars.
Geely's sales in Russia fell by a whopping 55 percent during the last quarter.
The expectation is now that the entire 2025 car year will be just as bad for the industry. This can be compared to the level in 2022, when Russia attacked Ukraine.
Several Chinese car brands are now forced to offer large discounts. The discounts are around one million rubles. This corresponds to approximately 120,000 Danish kroner per car.
The management of AvtoVaz, the group that owns Lada, is critical of its Chinese competitors. They are now accusing the Chinese car manufacturers of blatantly dumping prices. This is creating further tensions in the market.
The Russian business magazine Vzglyad takes a gloomy view of the future of Chinese brands, predicting that several Chinese car companies may be forced to leave the Russian market altogether.
At the same time, many Russian car dealers risk going bankrupt.
While Geely struggles in the Russian market, you can read more about how other car brands fled Russia three years ago, and what it means for the country's car production today, right here .
