On April 9, Bloomberg published economic news that in the first two months of 2025, the number of cars imported by Russia from China fell sharply, almost halving from the same period last year - to 57,592.

Against this background, Russia lost two places in the list of China's largest automobile exporters at once - from the first place last year to the third place this year. This is the first time in two years that Russia has lost its position as the main market for China's automobile industry.

From January to February 2025, automobile exports to Mexico topped the list with 85,997 cars. Although we all know that Mexico is the largest importer of automobiles from the United States, the cars we export to Mexico are not needed by the Mexican market, but the needs of our cars for re-export to the United States.

The second is the United Arab Emirates, to which we delivered 71,418 cars.

Data released by the China Passenger Car Association proves this. After Russia invaded Ukraine, as Western car brands collectively withdrew from the Russian market, Chinese cars quickly filled the market gap. Russia quickly became China's largest exporter of cars. Chinese car brands accounted for half of the Russian market share in 2023, and their share further increased to about 60% in 2024.

However, since the beginning of 2025, the economic recession caused by the distortion of Russia's wartime economy has begun to emerge, and the Russian market as a whole has shown a rapid and deep downturn. At the same time, in order to protect its own car brands, Russia quickly tightened its policies by imposing high recycling fees on imported cars, and the sales of Chinese car brands in the Russian market also fell sharply.

According to the data of the Passenger Car Association, the overall sales of Russian cars reached 1.83 million in 2024, a year-on-year increase of 91%. From January to February 2025, the cumulative sales of the Russian car market reached 191,000 vehicles, a year-on-year decrease of 14%. Among them, sales in February reached 90,000 vehicles, a year-on-year decrease of 29%.

In January and February 2025, China's automobile exports to Russia fell sharply by 16% to 71,400 vehicles, and the sales of most Chinese automakers in Russia, such as FAW and Dongfeng, shrank sharply.

According to data from independent third-party Autostat, sales of Chinese cars in Russia fell 17% to 91,000 units in January-February 2025 compared with the same period last year. The decline was 3 percentage points more than the 14% decline in total Russian car sales.

Autostat believes that the decline in the number of imported cars in Russia began in November 2024, when dealers bought a large number of cars before the new recycling rate took effect on October 1. By February 2025, the total number of new cars imported into Russia fell 73% year-on-year to 16,200. It was also almost halved compared with January 2025, a drop of 49%.

At the same time, imports of used cars in Russia also fell significantly by 20% to 18,500 units.

It is worth noting that despite the overall reduction in imported cars in Russia, China remains the main supplier of new cars to Russia. In February 2025, Chinese cars accounted for 80.9% of all Russian car imports.

Among used cars in February, Japanese models were the most frequently imported - accounting for 53.4% of imports (mainly Toyota). In second place was South Korea, accounting for 20%. Third was China (accounting for 9.6% of imports). Then came Georgia (7.5%), Belarus (3%), Germany (1.8%), the United States (0.8%) and the United Arab Emirates (0.8%).

Russia's car sales fell sharply, and imported cars fell off a cliff. There are three main reasons:

First, the distortion of the economic structure dominated by the military economy began to lead to Russia's economic recession.

Because the huge investment in the military economy produced disposable military consumables that could not meet the reproduction needs of the labor force, this distorted economic structure led to Russia's continued hyperinflation and super-high interest rates, giving rise to Russia's economic recession. According to Kommersant, Russia's inflation was close to 10% from January to February, but even in the military industry, nominal wages began to stagnate. Purchasing power shrank sharply, which was the main reason for the 14% year-on-year decline in Russia's car sales from January to February.

Second, Russia has significantly increased the recycling fees for imported cars in order to protect its domestic automobile industry.

When analyzing the sharp decline in car imports from January to February, the Russian newspaper Kommersant bluntly stated that the reasons were falling demand, excess warehouse inventory, and a sharp increase in the recycling rate of imported cars. Russian car dealers hoarded a large number of imported cars before the recycling rate of imported cars increased significantly in October 2024, which was the main reason for the excess inventory in warehouses.

Third, international politics will also affect consumer behavior.

Kommersant said that Russian consumers are now considering whether US President Donald Trump can stop the war in Ukraine. If the conflict ends, foreign manufacturers can return to Russia. In fact, Russians do not like Chinese car brands. In the past two years, Chinese cars have been popular in Russia because the collective withdrawal of Western car brands has left Russians with no choice. Trump and Putin's armistice negotiations have rekindled Russians' hopes for Western car brands. Therefore, Russian consumers may be waiting for the return of European or American car brands.

Faced with such uncertainty, Chinese automakers can only be more inclined to adopt a cautious strategy: reduce supply and avoid accumulating excess inventory. This trend may continue in the coming months-until the outlook becomes clearer.