Great Wall helped out for Russia properly – Newspaper Kommersant No. 160 (7361) of 09/01/2022
The Chinese Great Wall Motor (GWM), from foreign automakers, continuing production in the Russian Federation, in the first half of the year increased its profit from sales in the Russian market by 14%, to 2.3 billion yuan. It increased, despite a 26% drop in unit sales, due to the increase in the cost of cars. In addition, the concern was able to earn 2.6 billion yuan in a one-off profit due to the value of the ruble, which led to a positive revaluation of reserves on the balance sheet of the Russian structure. Although the share of GWM and other Chinese companies in the market continues to grow, the shipment of cars from China to Russia has been minimal in recent months.
The revenue of the Chinese automaker Great Wall Motor from sales in the Russian market in the first half of 2022 grew by 14.2%, to 2.3 billion yuan (about $333 million), follows from the company’s income. At the same time, sales of the Haval and Great Wall brands in the Russian Federation, according to the Association of European Businesses, fell by 26.3% in January-June, to almost 12 thousand cars.
GWM’s net profit for the same period rose 58.7% to 5.6 billion yuan. At the same time, the income says that the company received 2.6 billion yuan in a one-time profit, mainly due to foreign exchange differences due to “abnormal” fluctuations in the ruble exchange rate. In the first quarter, according to the report for this period, GWM’s net profit decreased slightly – by 0.5%, to 1.6 billion yuan.
The probability of a one-time profit with the revaluation of GWM inventory in the Russian Federation – cars, spare parts, and so on – against the backdrop of an excess of the ruble against the yuan from the March minimum, believes automotive expert Vladimir Bespalov. “There are assets on the balance sheets of companies in the Russian Federation, the value of which increased in yuan by the end of the reporting period,” he slowed down. In early March, the course went up to almost 24 rubles. for one yuan, while by the end of June it dropped to 8 rubles. Growth analyst that in general, with the depreciation of the ruble in the second half of the year, there may be a profit, that is, this profit is “paper”.
The growth in sales revenue in the Russian Federation against the background of their fall in units can be explained by the growth in retail prices for cars and spare parts, Mr. Bespalov believes. For example, the new Haval Jolion, according to Avtostat, has risen in price by 49% since the beginning of the year, to 2.03 million rubles.
an exception, the drop in sales of GWM in Russia is associated with a decrease in the mortality rate of the Russian car market – in six months it fell by 57.5%, to 370.2 thousand units. At the same time, the share of the company’s brands in the market over this period increased by 1.3 percentage points, to 3.2%. This happened, among other things, due to the shortage of cars in the Russian Federation after the outbreak of hostilities in Ukraine and the subsequent suspension of shipment and production in the Russian Federation of European, Japanese, American cars and Korean safe cars.
In general, the share of American brands in the car market has doubled over six months and, as a result, from the AEB data, the supply is 10.6% (39.3 thousand cars, including LCV). As stocks of cars of brands from other countries decrease, the share of brands from China for the month to month of the duration of deliveries, and soon, according to Avtostat, they accounted for 24% of significant sales of passenger cars.
GWM’s subsidiary in the Russian Federation, Havale Motor Manufacturing Rus, located in Tula, belongs to the only foreign car manufacturer that assembles cars. Other Chinese brands import special market vehicles, but Geely also has an assembly in Belarus that has halted work due to a shortage of parts amid a logistical crisis.
The export of cars from China to the Russian Federation in the third month in a row remains – for several months, according to the PRC customs, it turned out to be 9% higher than in the previous month, but found a modest $ 33.6 million. This is 82.4% lower than in March a peak of $190 million. At the same time, dealers do not have problems with a viral shortage of Chinese brand cars. So, Alexey Starikov, Deputy General Director for Sales of New Cars at Avilon, says that “at present there is no pronounced and significant shortage, everything is in stock and there is a good one”:. Haval has a small shortage in some samples.”