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Western sanctions against Russia are boosting demand for Chinese cars and this surge could continue as long as those sanctions remain in place, an executive with China’s auto association has told Reuters.

Chinese automakers were also planning to assemble vehicles in Russia and localise production, Xu Haidong, deputy chief engineer at the China Association of Auto Manufacturers (CAAM), told the news agency.

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“There’s still huge demand in the Russian market but that won’t necessarily be solely reliant on imports,” Xu said.

“China’s auto exports to Russia will still be in high demand over next 2-3 years and after that China’s auto sector will likely increase their localisation in the Russian market.”

Reuters, citing CAAM data, noted Russia was the top destination for China’s auto exports for the first seven months of the year with 464,000 cars sold. Mexico was second with 224,000 units.

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For the whole of last year, Mexico was the top importer of Chinese cars with 254,000 units while Russia was the fifth largest with 162,000 units, the CAAM data showed.

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Reuters said imported Chinese cars now accounted for 49% of Russia’s market, reaching 40,000 units in June, compared with a pre war share of just 7% in June 2021. Chinese firms were also assembling vehicles in Russia, taking over factories vacated by western automakers.

China was the world’s largest auto market but Chinese automakers were increasingly looking abroad to offset intense competition and weakening demand at home, the news agency report added.