Chery Accuses Russian Assembler of Unauthorized Distribution

VIENNA – China’s Chery Automobile Co. Ltd. says its Russian assembler, OOO Russlegavto, has been selling the Chery Tiggo cross/utility vehicle illegally.

“It has come to our attention that some entities in Russia have been assembling and/or distributing Tiggo vehicles without our authorization,” Chery says a joint statement with Chinese partner Bondy Trade (Wuhu) Co. Ltd. and Russian importer ZAO Chery Avtomobili Rus.

Russlegavto, as well as Russian auto maker OOO Taganrogsky Avtomobilny Zavod (TagAZ), are controlled by FPG Doninvest.

After ZAO Avtotor phased out assembly of Chery cars in March 2008, Chery reached an agreement with Rosslegavto and TagAZ to assemble two of its models, the A5 sedan and Tiggo, from complete-knocked-down kits.

Chery says it has received only 250 Tiggos from Rosslegavto, which began assembling the vehicle in fall 2008. Chery claims Russlegavto, as well as TagAZ, are instead selling Tiggos on their own.

Chery was the No.1 Chinese brand in Russia until last year, when Avtotor phased out Chery assembly and sales subsequently declined. Geely is now the best-selling Chinese brand in the country.

Russian Chery sales plunged 82.8% in the year’s first seven months to 1,949 units, placing the brand No. 33 in the market. TagAZ sold 707 Chery Tiggos in first-half 2009.