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Tough year for vehicle exports to Russia

By Shangguan Zhoudong (chinadaily.com.cn)
Updated: 2008-05-20 16:43

China's automotive exports to Russia are facing a difficult this year as the Russian vehicle import policies are tightened and stricter tests are required, the Shanghai Securities News reported today.

Starting July 1 this year, Chinese automakers can't export commercial vehicles to Russia if they fail to pass 55 quality standards.

Additionally, the Russian government also released policies in July last year temporarily disapproving any Chinese vehicle assembly plant in the country.

Suffering from such tough policies, in the first quarter this year, vehicle exports through Manzhouli, a major port to Russia, drop sharply compared with the same period last year.

In the first quarter, a total of 1,316 complete vehicles were exported through the port, down 57 percent year on year, with export value reaching $21.34 million, down 43 percent compared with the same period last year. Nearly 100 vehicles not complying with the Euro III emission standards were returned, statistics show.

But auto imports in Russia soared in the first quarter. Statistics from Russian customs suggest that a total of 432,200 vehicles were imported during the period, up 49 percent. The country also imported 23,500 trucks valued $779.6 million in the first quarter, up 32.8 and 96 percent respectively year on year.

"Chinese cars sell not very well in Russia and commercial vehicles such as heavy-duty trucks have gotten into trouble," said Zhu Jingcheng, chairman of Siber Auto Export Company, a Chinese auto exporter focusing on business in Russia and the Middle East.

"The major reason behind this is the implementation of Europe III quality standards. Most Chinese commercial vehicle markers obtained export licenses in March, but they will expire by June 30," said Zhu.

According to Zhu, completing export procedures like production and delivery costs at least three months, meaning even if the vehicles are exported, they are still not allowed to be sold in the country.

Chinese vehicles will have to undergo 55 more complicated tests starting July 1, much higher than the current 11, affecting Chinese vehicle exports to Russia. In addition, Chinese auto exporters also will no longer enjoy current simplified and preferential "small-batch export" policies.