Core Viewpoint - The article discusses the shift in the Russian automotive market from new cars to used cars, highlighting the challenges faced by Chinese car manufacturers and the emerging opportunities in the used car export sector [2][3]. Group 1: Market Dynamics - Since 2025, the Russian automotive market has seen a decline in new car sales, with total sales dropping by 29% to 600,000 units, while the market share of Chinese brands has reached approximately 55% [3][10]. - In the first half of 2025, Chinese car exports to Russia fell by 59.2% to 171,000 units, marking the largest decline among the top ten export markets [3][10]. - The used car market in Russia is experiencing growth, with a significant increase in the import of used vehicles, which accounted for 55% of total imports, up from 30% the previous year [13]. Group 2: Transition from New to Used Cars - The initial phase of the market was characterized by high profits from new car sales, but as competition intensified, margins decreased significantly, leading to a shift towards the used car market [5][6]. - The demand for used cars is driven by lower prices and favorable tax conditions for vehicles aged 3-5 years, which have a significantly lower scrappage tax compared to new cars [13][14]. - The article notes that the average profit from exporting a used car is around $1,000 to $1,500, with rare models yielding profits of up to 20,000 to 30,000 RMB [14]. Group 3: Challenges and Opportunities - The Russian market has become increasingly competitive, with many Chinese car dealers exiting due to high costs and low margins, leading to a significant reduction in the number of Chinese dealerships [7][8]. - Regulatory changes, including increased scrappage taxes and stricter import policies, are impacting the feasibility of new car exports, pushing companies to adapt their strategies towards used car exports [10][11]. - The article emphasizes the need for Chinese car manufacturers to establish local production facilities in Russia to navigate the evolving market landscape and mitigate risks associated with policy changes [11][12].