Chinese Brands Facing Escalation in Russia Due to Deals Involved
In Russia, the market presence of Chinese car brands is under threat as a growing number of dealers are leaving or reducing their activity. According to Nikolai Ivanov, head of the new car sales department at Rolf company, this situation negatively affects the prospects of brands like Kaiyi, which has already lost a significant number of partners.
The departure of dealers is not voluntary but a consequence of the possible collapse of the dealer network. Market oversaturation, policy changes increasing import taxes, declining demand from economic difficulties, dealer financial problems, and some brands’ poor support and marketing investment are contributing factors.
Since Chinese brands flooded the Russian market after Western brands left in 2022, intense competition among many dealers led to oversupply and heavy price cutting. This, combined with Russia closing tax loopholes and increasing costs for Chinese imports, has reduced profitability for dealers. Moreover, the declining overall Russian auto market, with new car sales dropping by 28% year-on-year in the first half of 2025, further pressures dealers financially and reduces demand.
Russia’s economic struggles, such as reduced consumer purchasing power, have made vehicles unaffordable for many, leading to approximately 200 car dealerships closing and 30% more at risk of closing. Around 400 dealer contracts were terminated in Q2 2025, including some top-selling brands. Dealers acknowledge overabundance of showrooms and warn they might stop cooperating with certain brands.
Some brands, notably Kaiyi, have lost many dealers due to poor dealer support, supply issues, weak marketing, or flawed strategy, which might push dealers to abandon these brands. The press service of Kaiyi, however, stated that they do not plan to suspend their activities.
It is important to note that the report does not provide information on the current state of the dealer network for these Chinese car brands, nor does it specify which specific Chinese car brands are affected. The potential issue is a collapse of the dealer network for these Chinese car brands, which could lead to the withdrawal of these brands from the Russian market.
Despite the challenges, some Chinese brands do not adequately invest in marketing, impacting dealer confidence and sales. However, it is believed that these brands will likely maintain at least a nominal presence for strategic reasons. The statement was reported by Gazeta.Ru. With lower figures, a company starts to incur losses, according to the expert, making it crucial for these brands to address these issues and adapt to the Russian market to ensure their continued presence.
Business struggles are affecting Chinese car brands like Kaiyi in Russia, as dealers face financial difficulties due to factors such as market oversaturation, policy changes increasing import taxes, declining demand from economic hardships, and lower profitability. In an effort to cut losses, dealers may withdraw from these brands, leading to a potential collapse of the dealer network and withdrawal from the Russian market. The need for these brands to invest in marketing to support dealers and adapt to the market is crucial for their continued presence.
