China strengthens its presence in the Russian car market.

In a remarkable move, the Chinese car manufacturer Chery has commenced vehicle assembly in Russia. The production facilities, previously operated by Western companies such as Volkswagen and Mercedes, have now found new operators producing Chery models. This is an evident sign of China's increasing influence on the Russian automotive industry and the underlying economy, since Western competitors exited the market following the Ukraine conflict. Chery, responsible for nearly a fifth of the Russian passenger car sales, imports almost fully assembled vehicles to Russia to complete the assembly lines in three Russian factories. This strategy might be favored by the current challenges in the domestic automotive market of Russia and the related production capacities. Despite growing Western distrust regarding the Chinese-Russian cooperation, these measures could help Chery maintain a firm foothold in the Russian market. Interestingly, the Chery Tiggo 7 is rebranded as the Xcite X-Cross 7 at the St. Petersburg plant, reminiscent of JAC's revival of the Moskvich models. The export approach, known as "Semi Knocked Down" (SKD), enables efficient customization and completion of vehicles in Russia. In Kaluga and Esipovo, Chery models are assembled by local partners, including the luxury variant Exeed VX. Already, Chery's sales figures have surpassed those of the previous year, setting new benchmarks for the company's global expansion strategy, as it aims to enter many new markets in the coming years—despite increased EU tariffs on Chinese electric vehicles. While China and Russia intend to keep the extent of the cooperation under the radar, the economic impacts are noticeable on both sides.