Russia has introduced new tariffs on Chinese car imports in an effort to stem the influx of low-cost vehicles, a move that could have significant implications for Chinese automakers. The decision comes as Chinese vehicle exports to Russia skyrocketed to seven times the level of 2022, following Western sanctions that cut Russia off from brands in the US, Europe, and other allied nations.
According to the China Passenger Car Association (CPCA), Russia purchased over 1 million Chinese vehicles in 2023, accounting for 30% of China’s petrol car exports. This surge has allowed Chinese brands to capture 63% of the Russian market, while domestic brands’ market share plummeted to 29%.
The Financial Times reports that Moscow has responded by raising “recycling fees,” which function similarly to tariffs. In January, the fees were increased to RUB 667,000 ($7,500) for most passenger cars—more than double the amount from September 2023. These fees are expected to rise by 10-20% annually until 2030.
Gregor Sebastian, an automotive analyst at Rhodium Group, noted that Russia is following the lead of other countries in seeking to limit the impact of cheap Chinese vehicles on local manufacturing. “They want them to step up local production,” he said. “For a while they felt like they had no other choice, but now they are recognizing they have bargaining power—they’re a quite important market for Chinese carmakers.”
In addition to tariffs, Russia is tightening safety regulations. A recent inquiry found that three major Chinese truck manufacturers violated safety standards, leading to a ban on one model. Officials have also hinted at introducing stricter compliance and testing measures for imported vehicles.
The boom in Chinese vehicle exports has largely flowed through border towns such as Suifenhe in northeastern China. Exports from Suifenhe to Russia surged fivefold from 2020, reaching RMB 14 billion ($1.9 billion) in 2023, making it China’s busiest non-energy trading hub with Russia. However, merchants in Suifenhe have raised concerns about the impact of new tariffs on their businesses.
“There is a lot of concern, a lot of grumbling about the tariffs, and what it will mean for us,” said a local car merchant. “Europe and America sanctioned them, so they turned to us.”
Chery, a state-backed Chinese automaker and Russia’s top-selling Chinese brand, sold 430,000 vehicles in the first three quarters of 2024, representing 28% of its total sales. The company, which is preparing for a public listing in Hong Kong, acknowledged in its listing documents that Russia was a key revenue source. However, it has since announced plans to reduce its exposure to the Russian market to mitigate sanctions risks.
Chinese second-hand and petrol vehicle exports have also surged due to declining domestic demand for non-electric cars. Petrol vehicles comprised 97% of Chinese car shipments to Russia last year. Meanwhile, exports of used cars from Suifenhe rose by 612% in 2024, fueled by new Chinese policies supporting used vehicle exports and a domestic “cash for clunkers” initiative encouraging drivers to sell older petrol cars.
Despite the new Russian tariffs, some exporters are finding ways to bypass the restrictions. A Suifenhe-based exporter, identified only as Chen, explained that he now sells directly to Russian drivers rather than dealerships to avoid recycling fees. “Our volumes are similar, but there’s much more work involved,” he said. “Before, with the dealers, we’d sign a contract for 50 or 100 cars. Now, it’s one contract for one car.”
As Russia continues to tighten restrictions, Chinese automakers and exporters face an increasingly uncertain landscape, balancing lucrative market opportunities with evolving trade barriers and regulatory challenges.
