Gray Market Surge: China's Stealth Auto Export to Russia

Thousands of cars are clandestinely exported from China to Russia via gray-market channels, bypassing Western and Asian sanctions. Western brands like Toyota, Mercedes-Benz, and BMW use Chinese intermediaries to sustain trade, despite efforts from manufacturers to halt unauthorized exports. China's role as a major conduit has grown significantly.

In defiance of Western and Asian sanctions, tens of thousands of vehicles are being exported from China to Russia via gray-market channels. According to registration data reviewed by Reuters, Chinese intermediaries facilitate this clandestine trade in popular Western brands like Toyota, Mercedes-Benz, and BMW, ensuring continued market presence.

This thriving trade sees vehicles, mainly manufactured in China or shipped through it, reclassified as 'used' to avoid automaker restrictions, exploiting China's competitive car market. These cars, labeled zero-mileage used vehicles, are sold in Russia at prices comparable to new cars, despite automakers' attempts to curb exports, which includes regulatory measures and dealer training.

Data from Russian research firm Autostat reveals that since Russia's 2022 invasion of Ukraine, the number of Western brand vehicles entering Russia via China has soared. Despite automaker pledges, China's burgeoning role in this trade highlights the difficulty in enforcing export bans amid complex international networks.