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Business / Auto China

China's automakers hit by rouble depreciation

By Li Fusheng (China Daily) Updated: 2015-01-05 09:18

Great Wall Motors' sales in Russia fell to 16,631 units in the first 10 months, a 22 percent slump from the same period last year.

The automaker entered the Russian market in 2004 and has since become the most popular Chinese auto brand in the country.

Russia is Great Wall Motors' largest overseas market. In 2013, it sold about 20,000 vehicles in Russia, with sales revenues reaching 1.65 billion yuan, nearly 35 percent of its revenue from overseas operations.

Earlier last year Great Wall Motors announced plans to build a 3.2 billion yuan facility in Russia with an annual capacity of 150,000 vehicles.

Building facilities might be a feasible measure if Chinese automakers wish to gain favorable policies from Russian authorities against the backdrop of continuous rouble depreciation, said auto analyst Zhang Zhiyong in an interview with China Investment Network.

"But nobody knows whether the investment will pay off as it is uncertain when the Russia economy will return to normal. That uncertainty is affecting Chinese automakers' determination," said Zhang.

Considering the uncertain Russian economy, some analysts suggested that Chinese automakers should seek to expand their presence in other markets as an alternative.

Many argue that the suggestion would not serve as an immediate remedy, but agree it is a timely reminder that Chinese brands should not slacken efforts to improve the quality of their vehicles, because quality matters more than price for customers in most developed economies.

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