The port of Irkeshtan in southern Xinjiang is the westernmost port in China, opposite Osh Oblast in Kyrgyzstan.
In recent years, this remote border crossing has exploded. From a border town with few people, it has become a major artery for China's automobile exports. Locals in Irkeshtan woke up with their jaws dropped, they had never seen such a battle in their lives: in the first month of 2023, more than 800 Chinese-made cars were exported from this port, more than in the previous two decades of the port combined.
The change in Irkeshtan comes from the sharp increase in Chinese car exports to Russia in recent years. Countless Chinese cars have finally reached the Russian market through Central Asia.
Throughout 2023, Chinese car brands sold 950,000 cars in the Russian car market, an increase of 48 times, the increase in exports to Russia directly drove the total increase in China's auto exports, and at the same time, domestic brands are also on the Russian car list "slaughter list" - from the second to the seventh, all are domestic brands - Chery sold nearly 120,000 units, winning 11% of the market share; Haval sold 110,000 vehicles, taking a 10% share; Geely, Chang'an, Xingtu and other brands have also found their own piece of cake in Russia.
The popularity of Chinese cars in Russia has become more than just statistical.
My friend Lao Chen went to Russia some time ago for an investigation, and when he stood on the streets of Moscow, he sighed to me:
There are really many Chinese cars in Russia, and almost all of the new cars are made in China. ”
In fact, the Russian traffic police are now intensively studying the appearance features of Chinese cars.
In the past, they knew it was a BMW by looking at the front grille with two big nostrils, but now, with the expansion of Chinese brands in Russia, Russian traffic police must learn to recognize the brand of Chinese cars.
Even, the real data may be higher than the public - because the major car companies are actually more or less "unable to let go" in the matter of exports to Russia, in order to avoid some risks, everyone generally chooses to keep a low profile - obviously scored 100 points, but I have to say that I just just passed.
This atmosphere can also be regarded as the intangible cultural heritage of East Asian writers.
The reason why Chinese cars can achieve such outstanding results in the Russian market is that the various sanctions encountered by Russia are of course an important factor, but the more important factor is the efforts of Chinese companies themselvesThis is a complete "dimensionality reduction strike" - the weak and sickly Russian auto market, after the unprecedented sanctions blockade, encountered a developed and mature Chinese auto chain.
Today, let's talk about why Chinese cars can achieve dimensionality reduction in Russia.
The Russian car market, what it looks like
A country's car market, there is a country's preference.
From this preference, we can see a lot of deep things.
For example, Japanese people seem to be very fond of cars, and when you stand on the streets of Tokyo, you can see that the streets are full of short "k-cars". Because of this, many people in China boast about Japanese culture, saying that Japanese people are introverted and low-key, unlike Chinese who have good face and talk about vanity.
, that's it.
Japanese people like small cars because since the enactment of Japan's "Garage Law" in 1962, Japanese consumers must also submit a parking space certificate when buying a car. If you don't have your own parking space, you can't buy a car. It's okay in the countryside, in a place like Tokyo, where every inch of land is at a premium, the best people who buy a parking space are more eager to buy than they are to buy a car - purely defend a five-figure car with a seven-figure parking space.
The smaller the car, the lower the cost of the parking space – and that's why most Japanese consumers are so old-fashioned.
Another example is why Americans always like Ford's big pickup trucks? Is it because Americans are heroic and masculine?
Neither is it. The underlying reason is that pickup trucks can meet the needs of all classes in American society from top to bottom - in the working class, there are a lot of "family businesses" in American society - and fathers take their sons who graduated from high school out to help people repair water pipes and roofs. In the middle and upper strata of society, the American middle class and the wealthy have the need to go out camping and hunting.
Whether it's repairing the roof of a water pipe or hunting and camping, the common feature is that you need to carry a lot of tools and equipment.
At this time, the advantages of pickup trucks are shown: pickup trucks can meet the fun needs of rich people, and can become a good helper for working people, and naturally become a popular model. The best proof of this is this: Chevrolet has been buying pickup trucks for so many years, and the advertising slogan is always emphasizing "work" and "play".
Therefore, the development of society and society are synchronized: the level of social development determines the level of automobile products, and the level of automobile products reflects the level of social development - in Russia, the same is true.
What does the Russian car market look like?
In the words of a friend of mine who is engaged in the auto parts industry, has been in Russia for most of the last half of the year, and has traveled to almost all major Russian cities from Vladivostok to Leningrad:
It's a market with polarized demand.
Russia's wealthy people's demand for cars is benchmarked against the luxury car markets in Europe, America, China and other countries.
Ordinary people in Russia have a demand for cars that is comparable to that of the third world such as Latin America and Africa, and they need a large number of cheap and easy-to-use cars.
There is no need to say much about the affairs of the rich, because the ultimate pursuit of the luxury car market in various countries is probably the top brands such as Rolls-Royce, Bentley, Ferrari, and Lamborghini - after all, the final destination of the rich is yachts and private jets.
What can truly reflect the background color of a country's automobile market has to be the market for ordinary consumers.
What do Russian consumers want?
Cheap and reliable.
This is what a Russian who has been driving an Avtoga sedan since Soviet times said:
Mercedes, Hyundai, Renault ......These cars are good, of course, but they don't have a "Russian flavor" – the real "Russian flavor" is: as long as it can get people from point A to point B, it's OK - something as cheap and reliable as a T-34 tank or an AK rifle.
With large screens, soft seats, and sophisticated design, Russians know that these things are good, but for Russians, these things are still too pompous.
Vladivostok, for example, is the largest market in Russia for second-hand cars, where there is a long strip of flat land widened between low hills and densely packed with thousands of used cars from Japan and South Korea. Many Chinese who come here to inspect the business will be shocked by the rough sales methods of Russia. There are no lavish showrooms, no sales in professional suits, just a concrete floor, a security booth, a row of imported second-hand cars, and a stout Slavic boss ......
In fact, since the collapse of the Soviet Union, Japanese and South Korean used cars have begun to penetrate from Vladivostok to the Russian market. Japanese and Korean cars are durable, cheap and cheap, and the Japanese and Korean cars that have been trained in the international market are simply dimensionally reduced in the face of the Russian market, and they are far ahead in terms of comfort and reliability.
This situation has evolved into 2022, and Russia has become the largest market for used cars in Japan and South Korea, digesting 25% of used cars exported from Japan every year. Russia is a country of left-hand drive cars, but in Vladivostok, you can see standard Japanese cars with the steering wheel on the right. It can be said that in terms of imported second-hand cars, Russia and Mongolia are in a position, and they are also important customers of used cars in Japan and South Korea. Even if you look at a few Russian car accident highlights**, you can find that there are a large number of old Japanese and Korean brand cars on Russian roads.
The reality of mass-import of used cars shows that the average Russian car consumer is really looking for two things: cheap and reliable.
In addition to the large number of used cars imported, there is also a widespread "passenger-to-cargo" conversion in Russia - the conversion of passenger vehicles into freight vehicles.
In China, this phenomenon is strictly forbidden, and even the small number of "passenger-to-cargo conversions" that exist in the gray area are limited to the conversion of small vans. But in Russia, taking a long-distance bus doesn't seem like something to hide.
The message is that there is a huge gap in Russia's capacity - because according to the normal laws of the development of the transportation industry, the market will continue to be segmented, and passenger and freight models will become more and more refined and professional. Only in the environment of a huge capacity gap will there be such an operation as passenger-to-cargo and cargo-to-passenger.
The third example is that Russia was still producing a large number of old Soviet cars until more than a decade ago, and there are even many Soviet-era cars on the road – such as the Lada 2107 series, which was produced from 1982 to 2012.
In fact, the old models are not terrible, Volkswagen's Santana, Toyota's Corolla and Land Cruiser are all decades-old models, but people have a big update every few years, so the brand has been able to stick to it. The weird thing about Lada is that after 30 years, people have not even changed their appearance, and they will always be square iron boxes with the flavor of the 80s.
In the case of the 2011 Lada, it is almost indistinguishable from the 1991 product - the center console is made of black plastic, and the passenger compartment hangs a silver nameplate with Lada on it - there is no large screen, no car machine, no various functions, only the simplest radio, an electronic watch, and the air conditioning and audio controllers are even more heavyweight, still using the kind of trolley design that was popular in the 90s.
You'd be hard-pressed to say it's a 2011 product.
To put it mildly, this is called "minimalism" and "retro design", and to put it mildly, this is "industrial waste".
The message revealed by this is that Russia*** and the world*** mainstream are quite disconnected. After all, at this point in time in 2011, BYD of the boatman brother has already launched E6, a new energy product, and in another two or three years, "Wei Xiaoli" will be established.
A large number of imported second-hand Japanese and Korean cars, a large number of passenger-to-cargo expedient, a large number of old cars designed in the 80s ......
To sum up, Russia's civilian use is very weak, and local car brands are simply unable to produce cars that meet the needs of their own people, let alone mention that they are "vulnerable", at least they are "weak".
Dimensionality reduction strike from China
As for why Russia *** became like this, that's a long story.
To put it simply: Russia has basically inherited all the problems of the Soviet Union, but it does not have a complete chain of the Soviet Union. This has led to a very serious situation: while Russia is constantly struggling with the West, it is heavily dependent on Western products - in the passenger car market, 70%-80% of Russian auto parts are imported.
Therefore, since the start of the Russian-Ukrainian war in early 2022, with the advent of Western sanctions, Russia has immediately collapsed - a large number of OEMs lack parts and cannot produce normally; At one point, Russia** even announced that it would allow the sale of cars without airbags, without body stabilization, anti-lock brakes, seat belt pretensioners, and that do not meet emission standards.
You know, this is already 2022, not 2012, 8 years have passed since the Crimea incident, but Russia has not changed its dependence on Western auto parts at all - is Russia not aware of domestic substitution? Not. The actual situation is that Russia has no ability to replace it at all.
Because since decades ago, the force driving the progress of the industry is no longer the automaker but the parts manufacturer. The development of new energy vehicles in China is a typical example of this - on the surface, it looks like a new energy vehicle brand is launching a new brand, but in fact, it is the core components and subsystem providers like CATL and Huawei behind the technology upgrade that are leading the technological upgrade.
After the start of the Russian-Ukrainian war in 2022, as soon as Western sanctions arrived, the Russian auto parts market immediately began to increase in price. Not to mention the complex parts of the engine, transmission, and car machine chips, the bumper, headlights, fenders, hoods, doors, and air intake grilles have also reached an increase of more than 30%.
It's ......Not to mention the comparison with China's ***, you are not as good as the level of a province.
In Changzhou, Jiangsu Province, Xingyu Co., Ltd., for example, there are 200 different assembly lines in the factory, with an annual output of 80 million lamps and lanterns - it can basically meet the needs of FAW series, SAIC series, GAC series, Dongfeng series, Changan series, BMW, Volvo, Jaguar Land Rover and other major vehicle brands.
There are at least a few hundred such companies in China.
What does Russia have?
This explains why, even in 2012, Russia was still producing Lada-2107 – how could the Russians not know that this thing was already behind? But if even this is not produced, then Russia's *** will be considered a real calf.
Why don't the average Russian consumer care so much about whether the interior of a car is luxurious? Because they know very well that the luxurious interior - those screens, sensors are of course good, but judging by the situation of the Russian ** chain, future repairs will be a nightmare.
Seeing this, we actually understand why Chinese cars can achieve great success in Russia - this is a high-dimensional and low-dimensional battle of the ** chain - because China's most important thing is industrial capacity.
Last summer, I took the train from Beijing to Manchuria to play, and half of the cramped sleeper compartment was filled with Russian men, women, and children carrying all kinds of Chinese goods with them — small household appliances, clothes, shoes, electronics, ......Looking at the Russians who brought things from China to Russia, it felt like seeing China in the 80s and 90s - when someone had a relative in the family who went to the big city, he also brought things back in large bags.
That's the difference in productivity levels.
When the European and American car companies in the Russian market retreated in a big way, leaving an empty market, the production of the Russian market suddenly fell into a state of suspension. The production of new cars is gone, and the spare parts of the stock car market are also far away. At the same time, China's first generation has ushered in the most powerful moment in history - whether it is fuel vehicles or new energy, a large number of domestic brands are soaring.
What's more, China and Russia are bordered by land, passing through the ports of Xinjiang, Inner Mongolia and Heilongjiang, and a large number of materials are continuously transported to Russia every day. For Russian consumers, choosing European and American cars, the result is that once there is a problem, the waiting time for spare parts will be calculated in months, and it is likely that it will not be able to wait for a year, after all, these things always have to be transferred from Kazakhstan, which has not been sanctioned.
But choosing a Chinese car, things are different, although the capacity bottleneck still causes a long wait, but compared to the European and American car parts that can never wait for the future, the Khitan accessories are still much more reliable.
Based on such differences, it is only a matter of time before Chinese cars enter the Russian market in a big way. And whether it is original imports, parallel imports, or local production of SKD and CKD, as long as today's Russians still need cars, seeking cooperation from Chinese automakers is almost the only option.
As a result, "Muscovites" became "Hefei people" - on November 18, 2022, Moscow Mayor Sergei Sobyanin announced that the factory left after the retreat of Renault in France would be used to produce the old Soviet "Muscovite" car that has disappeared into history, and the new generation of "Muscovite 3" car is simply JAC "Jiayue X4", and even the Chinese on the engine has not been erased.
What the future holds
Today's Chinese car brands are thriving in Russia, and even according to the most conservative estimates, Chinese cars have won 50% of the Russian market.
In the face of such brilliant figures, I wonder how Chinese brands such as Chery will feel.
For Chinese car companies exporting to Russia, Russia's local competitors are not the biggest risk, the biggest risk of Chinese cars in the Russian market must come from Russia's various policies - higher taxes and fees year by year, more and more complex management rules, Chinese car brands in Russia make a lot of money, but Russia certainly does not want to see the local market become the fat of foreign companies.
After all, fifteen years ago, it was still Chery and other Chinese car companies, or in the Russian market, Chinese brands once suffered a devastating blow that can be called a "catastrophe" - at that time, Russia ** announced: since July 1, 2008, Russia will cancel the qualification for the issuance of automobile quality inspection certificates produced by non-members of the Geneva Agreement (signed in 1958) to implement simplified procedures, China and India are affected countries.
Before July 2008, Chinese cars exported to Russia only had to undergo 11 tests.
However, after July 2008, the number of procedures for exporting Chinese cars to Russia will increase to 55.
The cost of obtaining a certificate of conformity has risen to $150,000.
In fact, cumbersome testing procedures are just an appetizer, and although it is troublesome, there are always rules to follow.
What's even more terrifying is that in addition to the restrictions on the testing process, the import tax on the body of the finished car at that time was also raised to 15% by the Russian side, and the import tax on each body started at 5,000 euros - for the Chinese cars that focused on "semi-finished product assembly" at that time, such a rule was smashed down, and life was completely impossible.
The only Chinese car that hasn't been hit too hard in this storm is Chery.
At that time, Chery was playing "CKD" - assembly of parts - in the factory in Russia, Chery welded and assembled the parts one by one. In this way, it was not affected by the policy of the Russian Federation at that time.
From today's point of view, what is more interesting than Russia's psychedelic policy is actually the reaction of Chinese netizens at the time.
China's *** is a little developed only in the case of domestic protection. Other countries don't even think about it! So the Chinese people are sad! It's all garbage trucks for sale**!
Motorcycles were defeated in Vietnam, cars were defeated in Russia, and our authorities were not responsible? The disunity of the Chinese is known to the whole world, so why don't our competent authorities know about it? ”
Those miscellaneous cars can't be sold in China, is there a market abroad??? In China, there are many people who don't know how to buy and sell those miscellaneous cars. ”
Fifteen years have passed, and I don't need to say much about the current situation.
Today's China is no longer the same China, but Russia's is frozen in time.
Feng Shui takes turns, for Chinese car companies, today in Russia, we finally stand in the position of European and American car companies that came to China in the 80s and 90s.