Geely is examining its future in Russia, casting doubt on expectations that China’s carmakers would push further into the country to take advantage of the exodus of international groups following Ukraine’s invasion.
Geely has suspended its operations at a factory in Belarus that exports to Russia, and has launched a review weighing the reputational risk to the brand of sticking with the country against the opportunity created by the halting of sales of major rivals from Volkswagen to Toyota.
The Beijing-based group, which owns Volvo and Lotus and has a minority stake in Mercedes-Benz, will consider potential supply chain problems and local market conditions, the company told the Financial Times.
“We are still monitoring the situation. Every element will be considered in this,” the company said.
Its potential withdrawal bucks expectations from analysts and some industry insiders that Chinese groups may use the gap created by the exodus of rivals to gain a greater toehold in the Russian car market, particularly as they are facing pressure from Beijing to increase exports.
Chinese car exports to the country tripled last year to 123,000 compared with 43,000 in 2020, according to Bernstein, while the country’s exports overall doubled to 2mn.
Beijing has said it wants Chinese auto exports to rise to 5mn a year by the middle of the decade, more than double the current level.
Carmakers from Europe, Japan and Korea have all cancelled sales into the Russian market following the invasion of Ukraine, while many are privately reticent about committing to resume exports, even in the event of peace.
BMW last week declined to answer a question about whether it will definitely return to the market, saying it will “cross that bridge” later on.
“The Russian market is absolutely a natural magnet for Chinese manufacturers given the current political climate,” said Michael Dunne, head of ZoZoGo consultancy and a longtime expert on China’s car market.
Geely’s market review and suspension of its Belarus plant, which serves the