China's Chery announces withdrawal from Russia, its largest foreign market

The Chinese state-owned automaker Chery Automobile has announced that it will almost completely shut down its business in Russia, the company's largest market outside of China, by 2027. This is stated in the prospectus for investors before the company goes public in Hong Kong, writes Nikkei Asia.

According to Chery, in 2022-2023, Russia brought it more than 40 billion yuan ($5.6 billion) annually, about a quarter of its total revenue.

The company explained that the decision to leave the Russian market was due to compliance with international sanctions and new Russian car import duties, which made sales economically unprofitable.

In April, the company transferred its car inventory, warranty obligations, and dealer network in Russia to three unidentified companies. As of March, Chery had 372 dealers and 687 sales outlets in the country.

In July, the transfer process was completed, and by 2027, all brands and sales channels in Russia will be eliminated, Chery said.

The company also stopped cooperation with Iran and Cuba to reduce the risks associated with sanctions.

At the same time, Chery plans to raise up to $1.2 billion on the Hong Kong Stock Exchange. As part of the IPO, the company is offering more than 297 million shares at a price of HK$27.75-30.75.

About 20% of the money will go to the development of electric vehicles and hybrids, and another 20% will be spent on international expansion.

• In October 2024, it was reported that Chery started assembling cars in Russia at three plants previously owned by Western companies such as Volkswagen and Mercedes-Benz.