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Chinese auto sales down in Russia market

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Shanghai, October 29, 2008: ( Chinese auto sales are declining in Russia though the emerging market still posts auto sales increase, said today, citing a report by a Russian automotive market research company.

The report said the first batch of Chinese vehicles into Russia, mainly pick-ups, sold 260 units in 2004. The later years have seen booming sales of Chinese vehicles, which sold 6,733 units in 2005, taking 1% share in Russia¡¯s imported auto market, 23,000 units in 2006 with 2.3. % market share and up to 57,000 in 2007 with 3.6% share.

Since the beginning of 2008, Chinese auto sales in Russia have been falling, only selling 25,000 units for a 2.4% market share in the first half as the Russian government issued ever stricter regulations on imported vehicles. The newly-approved inspection rules restricted imported cars and increased the cost for Chinese automakers on exports. And the export certificate costs $150,000 on average.

The report also pointed out that Russia recently increased the tax to 15%, or at least 5,000 euros imposed on each imported vehicle, making Chinese semi-knock-down (SKD) vehicles in Russia profitless. Currently, only Chery Auto, China's largest national carmaker, has begun complete-knock-down (CKD) production in Russia, which is not affected by the high tax.

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