AutoBeta(AutoBeta.net)11/19 Report--

Moscow Mayor Sergei Sobyanin (Sergei Sobyanin) said on November 18 that the "Muscovites" car production line would start assembling cars for the first time next week and hoped to reach the same level of production as when Renault was here next year. According to the plan, the Muscovite brand (Moskvich) will produce new JAC models, including four cross-border cars and a sedan, namely the Jiayue X4 (and its electric version), the Jiayue X7, the Sihao X6 and the Jiayue A5 plus.

Earlier, Mr Sobyanin said Muscovians would initially produce traditional internal combustion engine cars at Renault's Moscow plant, but would also produce electric cars in the future. He also pointed out that he was planning to cooperate with the Russian Ministry of Trade in order to purchase as many car parts from Russia as possible, and that Russian truck manufacturer Kamaz would become the main technical partner of the plant.

Data show that "Muscovites" were built into economic passenger cars during the Soviet period, occupied the leading position of the Russian automobile industry in the 1970s and 1980s, and were once regarded as a banner of the Soviet automobile industry, but later, because of improper management, they can only declare bankruptcy after owning a huge debt. According to Autostat, an analyst, there are still nearly 200000 Muscovites registered in Russia, of which more than 45000 have been in service for more than 35 years.

At the end of May, a "big earthquake" occurred in the Russian car market. As a result of the conflict between Russia and Ukraine, the French carmaker Renault Group announced the Russian market and will sell Volga cars (including factories), which have been in operation for many years, to NAMI, a Russian government-backed car research and development center, for 1 rouble.

Data show that Lada is the largest Russian automaker and is a brand of AvtoVAZ. French automaker Renault participated in AvtoVAZ restructuring and became its controlling shareholder in 2004. Renault entered the Russian automobile production of Lada cars and Renault brands, both of which accounted for 1/3 of Russia's total car sales. Data show that Russia sold 1.667 million cars in 2021, of which 351000 Lada cars were sold, accounting for 21% of Russian car sales and 12% of Renault car sales. Russia has become Renault's second largest car market after France. However, the conflict between Russia and Ukraine and the sanctions imposed by Europe and the United States against Russia dealt a heavy blow to Renault's production and operation in the Russian market, and announced on February 28 that it would stop production at its factory in Moscow. On March 23, it was decided to stop all activities at the factory in Moscow indefinitely.

Under the influence of the conflict between Russia and Ukraine and sanctions imposed by Europe and the United States, the Russian car market has suffered a major blow. Data show that Russian car sales fell 60.8 per cent year-on-year to 502474 in the first 10 months of 2022, with Lada car sales down 51.5 per cent to 142910 and Renault down 68.3 per cent to 34089. However, under the background that foreign businessmen such as Renault, Nissan, Toyota and Mazda have announced their withdrawal from the Russian market, Chinese independent brands have made great progress in this market. In October sales, for example, the Harvard brand was second only to Lada cars, down 7.8 per cent from a year earlier to 3912 vehicles, accounting for 9.8 per cent of the Russian market. In addition, Geely brand sales fell 1.7 per cent year-on-year to 2950 vehicles, accounting for 6.5 per cent of the Russian market.

As for the "Muscovite" brand, why did it choose the Chinese car brand as the goal of resuming production? First of all, it takes at least two years and at least $1 billion to develop a new car from scratch, and the current situation in Russia is very difficult to provide good conditions for development. Secondly, the sense of existence of Chinese brands in Russia is getting higher and higher. The market share of Chinese brands in Russia is only 2% in 2019, but it has reached 7% in 2021, and under the background that more and more foreign businessmen choose to withdraw from the Russian market, Chinese brands are determined to develop the Russian market, and Harvard, Chery and Geely brands stand out. However, although Jianghuai Motor also has passenger cars sold in Russia, the sense of existence is not very strong. Industry insiders say the departure of overseas brands is likely to be a new opportunity for Chinese car brands, which seek overseas expansion and predict that more Chinese brands are likely to seek to establish a Russian production base in the future.

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