‘Parallel Imports’ Keep Russian Automotive Market Afloat

ST. PETERSBURG – Russia is increasing so-called parallel imports of U.S. and other Western cars in an attempt to remedy a shortage stemming from global automakers’ departure from the local market.

Sometimes referred to as the gray market, parallel imports are vehicles supplied to Russia by countries with which it has maintained economic ties throughout the war with Ukraine, such as China and Turkey. The vehicles are sold in Russia for what is often much more than their actual value.

Two of Russia’s current best-selling brands are Buicks, the Encore GX and third-generation Excelle. Both are built in China by the Shanghai General Motors joint venture. Also appearing in the Russian market are Chevrolet Cobalt and Spark models built by UzAuto, a former joint venture between GM and a company owned by the government of Uzbekistan in central Asia.

The range of vehicles has significantly expanded in recent months to include Cadillac and Lincoln SUVs and Chevrolet Camaro coupes. Analysts say there is less demand for less-profitable mass-market brands.

Parallel imports account for an estimated 12% to 15% of all imports into Russia, but foreign cars also are making their way into Russia from neighboring countries through various legal and semi-legal schemes.

According to data from the Russian Federal Customs Service and local analyst agency Avtostat, imports of new passenger cars to the Russian market from January through May totaled 171,000 units, a 480% increase from the same period in 2021. Deliveries from China accounted for about 70% of the total – almost $1 billion a month.

In May alone, Chinese brands’ share of new passenger-car sales amounted to 46%. European brands’ share was 5%, South Korean brands’ was 8% and Japanese brands’ was 6%, according to government and Avtostat data.

For the first six months of the year, light-vehicle sales in Russia totaled 376,545, up 1.7% from 370,228 a year earlier, according to Wards Intelligence data.

AvtoVaz, domestic manufacturer of Lada models, was the top seller at 143,618, up 92.2% from the first six months of 2022. Chinese brands Chery, Great Wall and Geely ranked No.2, No.3, and No.4, Wards data shows.

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