Cars slowly move along an embankment of the Moskva river in downtown Moscow on October 25, 2022. (PHOTO / AFP)

Chinese carmakers are taking up market share in Russia, capitalizing on the departure of Western players that used to dominate the market before the crisis in Ukraine, auto industry data showed.

Imported Chinese cars now account for 49 percent of Russia's market, reaching 40,000 units in June, compared with a pre-crisis share of just 7 percent in June 2021, according to data from analytics firm Autostat.

Chinese carmakers' exports of passenger cars to Russia in January-May 2023 increased 5.2 times year-on-year to almost $3.6 billion, according to Chinese customs statistics, including exports worth almost $1 billion in April alone.

Six of the top 10 brands by market share in Russia are Chinese automakers, such as Haval, Chery and Geely, according to monthly sales data for June from Autostat

Chinese firms are also increasing their sales in Russia with vehicle assembly at factories vacated by the likes of Renault and Nissan, Reuters found.

Reuters spoke to two companies and four sources familiar with the matter who said that six factories in Russia that were formerly owned by European, Japanese and US carmakers or assembled their vehicles are now producing Chinese models or have plans to do so.

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Overall, the six factories have an annual capacity of around 600,000 cars, Reuters calculations show.

Russia's Industry and Trade Ministry did not respond to a request for comment.

Vladimir Bespalov, an independent expert on the automotive sector, said the growing presence of Chinese carmakers benefits Russia, enabling it to restart production at idled factories and keep workers employed. President Vladimir Putin said in 2020 the industry employed about 300,000 people.

After a chaotic decade following the collapse of the Soviet Union in 1991, Russia encouraged Western carmakers to build factories. It offered subsidies to those performing operations such as stamping, welding and painting locally, as well as incentivizing them to produce components in Russia.

By 2021, domestic production was running at around 1.4 million passenger cars – around half its installed capacity. That slumped to just 450,000 last year - the industry's worst showing since the collapse of the Soviet Union - as Western firms withdrew in the wake of the Ukraine crisis.

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Domestically-produced cars now account for less than 40 percent of Russia's car market, the government has said, down from 70-75 percent before the conflict in Ukraine.

"Undoubtedly, the expansion of Chinese carmakers on the Russian market will continue," said Andrey Olkhovsky, the head of dealership chain Avtodom.

Avtodom, which bought Mercedes-Benz's subsidiaries in Russia, is in talks with several Chinese automakers about assembling a premium Chinese car at the German carmaker's old Moscow factory and a partner could be announced by year-end, Olkhovsky said in an email.

Production of Chinese vehicles only began in Russia in 2019 with the arrival of Chinese automotive company Great Wall Motor.

Sales of its Haval cars, produced at its Tula factory, account for almost 10 percent of the Russian market now. Great Wall declined to comment for this article.

Six of the top 10 brands by market share in Russia are Chinese automakers, such as Haval, Chery and Geely, according to monthly sales data for June from Autostat.