Chery’s Russian Localization Strategy and Factory Prospects

No time to read?
Get a summary

Chery, the Chinese automobile maker, aims to seal a local partnership for assembling vehicles in Russia by the end of 2023, a move discussed by Sun Luquan, vice president of Chery International and chairman of the company’s Russian board, with the newspaper Vedomosti. The discussion reflects a strategic push to expand manufacturing operations in Russia and suggests a path toward deeper integration with the local market.

In Sun Luquan’s view, it is likely that the flagship Chery brand will take a lead role in production within Russia. The current Russian lineup already includes models from sub-brands such as Exeed, Omoda, and Jaecoo, indicating a diversified portfolio tailored to the local consumer base. The executive highlighted the economics of localization, noting that factory operations could become viable if annual sales reach around fifty thousand units. Recent figures show that about forty-seven thousand Chery-branded vehicles were sold in the first half of the year, excluding the sub-brands, underscoring a solid demand base that could justify localized manufacturing.

Sun Luquan also indicated that Chery is evaluating production at multiple Russian facilities. He spoke positively about the potential of a well-equipped factory and mentioned interest in the Kaluga plant previously operated by Volkswagen. Industry observers have noted reports from the Telegram channel Russian car suggesting that Chery is preparing to manufacture a batch of roughly 120 crossovers at the Kaluga plant in the autumn, signaling a concrete footprint at a site with historical automotive significance.

The broader context for these plans includes ongoing attention to how international automakers adapt to Russia’s evolving market and industrial landscape. The potential shift toward regional production would align with a growing trend of localization, aiming to reduce logistics costs, mitigate currency risk, and respond more rapidly to local demand. As Chery considers expansion beyond a single facility, the company appears to be prioritizing a networked approach that could distribute production across strategically positioned factories, balancing capacity with market access.

Looking ahead, the anticipated moves at Kaluga and nearby facilities, if realized, could influence the cadence of model introductions and the pace of capacity expansion. The focus remains on meeting local demand while maintaining global brand expectations for quality and reliability. Observers will watch how Chery navigates regulatory conditions, supplier networks, and the competitive dynamics created by established brands in Russia. The evolving scenario will also be shaped by consumer interest in the brand’s broader lineup, which includes Exeed, Omoda, and Jaecoo, each contributing to a diversified market offering.

Overall, Chery’s Russian strategy appears designed to balance the benefits of nearshoring with the need to build a sustainable, locally grounded operation. The path forward will depend on sales momentum, factory utilization, and the company’s ability to align production decisions with the realities of the Russian automotive landscape. The company remains open to leveraging multiple sites and optimizing its production mix to meet the evolving needs of Russian customers while safeguarding its regional growth ambitions as part of a wider global expansion plan.

No time to read?
Get a summary
Previous Article

RUSFAR and RUONIA: How Russia’s Market Benchmarks Shape Liquidity and Insurance Tools

Next Article

Global markets edge higher as PMI data and Jackson Hole loom