Chinese auto concerns want to “uberize” online car sales in Russia

Chinese manufacturers plan to launch online car sales, bypassing dealers and distributors. Negotiations are currently underway to create such a sales channel between a large automaker and a Russian IT company. This was reported by the Telegram channel Chinese cars, citing a source in the car market.

The China Association of Automobile Manufacturers sent a letter to Chinese automakers with an order “in view of the huge demand and, in fact, the lack of alternatives for the Chinese auto industry in the Russian Federation, to intensify the extraction of maximum profit through online sales, without the margin of dealers and distributors.” About it reported channel Chinese cars with reference to a source in the car market.

Against the backdrop of all the restrictions that the Russian car market has faced in recent months due to sanctions, the largest Chinese automakers have stepped up and are looking for partners among banks and IT companies who have experience in online sales in the auto segment. According to the source, at least one of the largest automobile concerns is in the final stage of negotiations with a Russian IT company. The parties to the deal are still unknown.

In other words, Chinese automakers are planning to make online the main sales channel in the Russian market. In July 2020, Hyundai launched such a scheme as an experiment. According to Aleksey Kalitsev, Managing Director of Hyundai Motor CIS, the company intended to sell up to 50% of cars through the online platform directly to end customers by 2025.

According to the company’s idea, dealerships should have left the issuance of cars, for which they would receive a fixed commission, which would correspond to the size of the margin from the sale of the car. The representative office expected that in 2021 at least 150 dealerships (out of 190 in Russia at that time) would issue cars sold directly.

However, already in the winter of 2021, official Hyundai dealers in St. Petersburg sent a letter to the Russian Automobile Dealers Association (ROAD) with a request to solve the problem with the entry of the Hyundai Motor CIS trading house (Hyundai’s Russian representative office) into the online sales market. According to the letter, the dealers were not happy with the role of “transmission link” for a fixed fee. This position was shared by authorized Moscow dealers of Hyundai cars. The further plans of the dealers were to apply to the Federal Antimonopoly Service. The car company itself did not begin to assess what was happening, but apparently, it was not possible to put Hyundai’s online sales scheme on stream. Spring 2021 many car owners noticedthat in the online showroom on the Hyundai website, cars became available only on credit, and in April the cars disappeared from the site altogether.

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