Foreign cars enter Russia via China, data shows

Tens of thousands of cars from China are being exported to Russia via the so-called gray market, which often circumvents Western and Asian sanctions as well as automakers' commitments to leave the Russian market after the invasion of Ukraine in 2022. This is according to registration data analyzed by Reuters and interviews with people involved in the trade.

According to data from the Russian company Autostat, Russian dealers order vehicles—from Toyota and Mazda to German luxury brands—through Chinese intermediaries. Many cars are manufactured in China at foreign brand factories, while others simply pass through China.

There is also a growing number of new vehicles that dealers in China first register as sold, then reclassify as used and export. This allows them to avoid having to obtain approval from car manufacturers to sell in Russia. These cars are sold at a discount in China, but in Russia they fetch prices comparable to new ones.

Autostat shows that foreign-brand cars manufactured in China now account for almost half of the approximately 130,000 vehicles sold last year in Russia by manufacturers from sanctioning countries. Since the start of the war, more than 700,000 such cars have been sold in Russia.

Car manufacturers claim that they have banned sales to Russia, but they say that controlling unauthorized exports is difficult. Sanctions experts point out that it is almost impossible to completely prevent sanctions from being circumvented.

(reuters, lud)