Chinese carmaker Chery Automobile has declared its exit from the Russian market, citing the need to align with global sanctions and to facilitate its upcoming initial public offering (IPO) in Hong Kong, according to a report by Nikkei.
Chery explained that its decision to scale back operations in Russia was to ensure it remains fully compliant with international sanctions and export regulations. The withdrawal will take place in stages, with the company aiming to finish the process by 2027.
Chery plans to raise around $1.2 billion from its planned IPO. The company indicated that the majority of the funds will be invested in developing over eight new electric and hybrid vehicle models, while roughly 20% will be allocated to expanding its operations in international markets.
In April, Chery’s Russian subsidiary, active since 2005, signed deals to transfer its assets to three undisclosed firms. The company noted it would systematically scale down its current brands and sales networks, anticipating that Russia’s share in its overall revenue would eventually become negligible, Nikkei reported.
Russia has been Chery’s second-biggest market after China. In 2024, one in every five vehicles sold in Russia was a Chery model, including the Chery, Exeed, Omoda, and Jaecoo brands. That year, the company sold around 325,200 units in Russia, contributing 25.5% to its global revenue.
By 2024, Chery operated 372 dealerships and 687 showrooms across the country. However, despite its strong presence, analysts point out that new recycling fees introduced by Moscow on imported vehicles have made the Russian market increasingly unprofitable.
As Chery does not produce vehicles locally, increased tariffs have negatively impacted its profitability. Nikkei also reported that the company is ceasing operations in Iran and Cuba to reduce its exposure to the risks associated with international sanctions.
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