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Chinese Auto Giant Chery Quits Russia After Years in Market Amid Sanctions
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![Photo of Ivan Khomenko]( "Photo of Ivan Khomenko")
Chinese automaker Chery Automobile has confirmed its decision to leave the Russian market as part of a broader strategy to comply with international sanctions and to support its planned initial public offering (IPO) in Hong Kong, Japan’s largest business and financial newspaper Nikkei reported on September 17.
According to Nikkei, the company aims to raise approximately $1.2 billion through the listing. Chery stated that the funds will be directed primarily toward the development of new electric and hybrid models—more than eight vehicles in total—while about 20% of the proceeds will be used to expand its presence in overseas markets.
Chery’s press service said the company decided to wind down its operations in Russia in order to “confirm compliance with sanctions and export controls.” The exit will be gradual, with the company planning to complete the process by 2027.
In April, Chery’s Russian subsidiary, operating since 2005, signed agreements to transfer assets to three unnamed companies.
The automaker indicated it would “gradually reduce the number of existing brands and sales channels,” after which Russia’s contribution to its revenue will become “insignificant,” according to Nikkei.
Russia has been Chery’s second-largest market after China. In 2024, one out of every five cars sold in Russia carried a Chery brand, including Chery, Exeed, Omoda, and Jaecoo. The company sold about 325,200 vehicles that year, accounting for 25.5% of Chery’s global revenue.
As of 2024, Chery operated 372 dealer networks and 687 showrooms in Russia. Despite this presence, new recycling fees imposed by Moscow on imported vehicles have made the local business increasingly unprofitable, analysts note.
Gregor Sebastian, senior analyst at Rhodium Group, described the move as a “huge turnaround.” Speaking to Nikkei, he argued that the decision was shaped both by Western sanctions and by Russia’s new import duties.
Since Chery does not assemble cars locally, the higher tariffs undermine profitability. Sebastian added that it has now become more advantageous for Chery to expand into the European Union, making the decision “reasonable” and one that will “pay off” over the long term.
Chery is also halting its operations in Iran and Cuba to minimize exposure to sanctions risk, Nikkei noted.
Earlier, the Russian consulting firm Kept reported that about 62% of Western companies with significant assets had exited Russia since the start of the full-scale invasion of Ukraine. By the end of 2024, 183 firms had left the market, with most transferring assets to local buyers or management teams.
