Chinese car manufacturer Chery Automobile has officially confirmed that it has decided to exit the Russian market. One of the main reasons for this unexpected decision is the strong sanctions imposed by the West.
Points of attention
- The decision marks a significant change as Chery had a notable market share in Russia with about 325.2 thousand cars sold in the past year.
- Chery has initiated winding down operations in Russia by transferring assets to undisclosed companies, signifying a strategic shift for the company.
Chery is leaving Russia
Chery Automobile intends to go public on the Hong Kong stock exchange to raise $1.2 billion.
They plan to spend all of these funds on expanding the line of electric vehicles and hybrids.
According to preliminary data, this includes more than eight new models. Another 20% of revenue will go to foreign expansion.
What is important to understand is that Russia is Chery's second largest market after China.
The company's press service officially confirmed that it had decided to curtail its activities in the Russian Federation in order to "confirm compliance with sanctions and export controls."
A year ago, virtually every fifth car sold in Russia belonged to the concern's brands. In total, the company sold about 325.2 thousand cars.
Chery has already begun to wind down its presence in Russia: in April, its subsidiary, which has been operating since 2005, entered into agreements to transfer assets to three unnamed companies.
A statement on this occasion was made by Rhodium Group senior analyst Gregor Sebastian.
According to him, this decision by Chery is a "huge U-turn."
