Analysts expect at least partial return of U.S. automakers to the Russian market this year, thanks to the acceleration of U.S.-brokered peace talks between Russia and Ukraine and the Trump Admin.’s plans to restore U.S-Russia economic cooperation.
The Trump Admin. says there are plans for a partial lifting of sanctions against Russia, which may create conditions favorable to the revival of U.S. vehicle sales in the Russian market, analysts say.
After the imposition of Western sanctions, new models from U.S. automakers almost completely disappeared from Russia. Some vehicles remain available, but they are sold strictly by order and volumes remain low. U.S. vehicles sold in the country typically are expensive models, most of which are supplied via parallel imports from countries such as China, Turkey and the UAE.
Most likely to make a return are fullsize SUVs that are in demand from wealthy Russians and for which there are practically no alternatives in the local market. But analysts note that those in-demand vehicles are powered by large engines, which will drive up cost by several million rubles ($24,000-$35,000) to cover a significant recycling fee recently put in place by the Russian government.
While there is a possibility current talks may allow deliveries to resume, most analysts do not expect significant volumes.
The Russian economy has been deteriorating since the 2014 annexation of Crimea, ending a period of active growth. That decline has impacted the local automotive sector and led Ford and General Motors to close their local production facilities well ahead of the start of the Russian-Ukrainian war and the imposition of increasingly stiff Western sanctions.
Rather than re-open production facilities or entering contract-manufacturing arrangements, some U.S. automakers may be interested in directly importing and selling cars in Russia. But so far, there’s been no movement either way by U.S. OEMs.
GM suspended its entire Russian operations in February 2022, and the automaker “can’t speculate on what could happen in the future,” Tara Stewart Kuhnen, director-Corporate News and Broadcast, tells WardsAuto. Ford declines comment.
In the meantime, Russian dealers are interested in supporting a return of the U.S. automakers. They say many customers are unhappy with the quality of Chinese cars, which currently dominate the market, and are looking for alternatives.
Nikilay Ivanov, spokesman of Rolf, one of Russia’s major dealership networks, says if American brands officially return, then “we will, of course, consider the option of cooperation.”
