By Alessandro Parodi, Gleb Stolyarov and Alexandr Reshetnikov
Feb 12 (Reuters) – Tens of thousands of cars are exported from China to Russia in gray market schemes that often circumvent Western and Asian government sanctions and carmakers’ pledges to leave the Russian market, according to registration data analyzed by Reuters and interviews with five people involved in the trade.
The company’s sanctions and pledges came in response to Russia’s 2022 invasion of Ukraine. But the thriving trade in these vehicles — from Toyotas and Mazdas to German luxury models — continues in part through informal networks that allow Russian dealers to order them through Chinese intermediaries, interviews and data from Russian research firm Autostat show.
Most are made in China – where many international brands build vehicles with local partners – or are shipped there after being manufactured elsewhere, according to data and sources. A growing number are “second-hand” vehicles with zero mileage – new cars registered as being sold in China by dealers or traders, who then reclassify them as used and export them.
The practice, highlighted by Reuters last year, is a symptom of China’s heavily subsidized and hypercompetitive auto market, allowing automakers and dealers to inflate sales figures, collect subsidies and export surplus vehicles. Traders who move European, Japanese and South Korean brand cars from China to Russia classify the new cars as used to eliminate the need to get the automaker’s approval for sales in Russia, said Zhang Ai Jun, a former exporter at a car dealer in Sichuan. “This is to export more easily,” she said.
Used cars with zero mileage are often very discounted in China. But in Russia, they are priced similarly to new cars that have never been registered, according to a Russian dealer and vehicle shipping documents reviewed by Reuters.
Reuters is the first to report the Autostat data, the emergence of China as the main route for foreign vehicles to reach Russia and the practice of avoiding sales restrictions by carmakers in Russia by classifying new cars as used.
Dmitry Zazulin, director of sales at the Moscow representative office of Panavto-Zapad, said that many customers want to buy and drive cars exclusively from Western brands, such as Mercedes. “However, currently we can only bring them through parallel channels,” he said. The dealership does not import used cars with zero mileage, he added.
Mercedes-Benz, BMW, Volkswagen and other automakers from sanctioned regions have said they are banning sales to Russia and doing everything they can to prevent unauthorized exports, including through training and contractual clauses with dealers. But they highlighted the difficulty of investigating potential violations: such investigations are “time-consuming and complex” and require third-party assistance, Mercedes said in a statement.
BMW said it had told its Chinese retail operation to “strictly oppose any potential export of vehicles to Russia”, adding that if cars do enter Russia as gray market imports, “this is happening outside our sphere of influence – and also expressly against our will”.
A Russian dealer, who spoke on condition of being identified only by his first name, Vladimir, told Reuters that his Vladivostok dealership does not stock restricted foreign cars but buys them one by one from Chinese dealers to fulfill customer orders. “There are a lot of intermediaries: this one knows that one; that one knows another and can get to the dealer,” he said.
DATA REVEALS SCALE OF TRADE
Sales appear with the thousands of data collected by Autostat. The figures show that Chinese imports account for an increasing share of all Western or Japanese-branded vehicles registered in Russia and volumes supported by South Korean brands.
The number of such vehicles made in China will more than double from 2023, the data shows. They now account for nearly half of the nearly 130,000 total vehicles sold in Russia in 2025 made by automakers from countries that impose sanctions, according to Autostat. Since Russia invaded Ukraine in early 2022, more than 700,000 vehicles from all these foreign brands have been sold in Russia.
Autostat data showed that Russians bought more Toyotas last year than any foreign brand except Chinese. But the automaker said in a statement that it stopped sending cars there in 2022: “Toyota does not export new vehicles to Russia,” the company said, without addressing the Autostat figures. Mazda, which also had significant sales, said the same and added that any new Mazdas sold in Russia “were resold through third parties not under Mazda’s control.”
Sebastiaan Bennink, a sanctions expert at European law firm Bennink Dunin-Wasowicz, said restricted products still often leak into Russia, even when industry players do their best to block them.
There are so many ways to avoid sanctions that it is “almost impossible to prevent certain cars from reaching Russia,” Bennink said.
While Autostat statistics show that China is the main route, Reuters could not determine all the routes by which vehicles reach Russia.
Germany’s economy ministry said customs authorities regularly investigate sanctions violations and work with counterparts in other EU countries to enforce the measures.
Japan’s Ministry of Economy, Trade and Industry said automakers, exporters and dealers are required to comply with the sanctions rules. It said it had warned domestic companies that knowingly exporting cars to third countries, including China, for resale to Russia could violate sanctions, while declining to comment specifically on trade in Japanese cars between China and Russia.
South Korea’s trade ministry said it was working to prevent circumvention of export controls and that the country had cracked down on indirect exports of used cars to Russia.
China’s Ministry of Commerce and Russia’s Ministry of Industry and Trade did not respond to requests for comment. Both countries have said they oppose unilateral sanctions and consider them illegal.
RUSSIA SALES OF FOREIGN BRAND CARS MADE IN CHINA
The European Union, the United States, South Korea and Japan have all imposed similar auto sanctions. They generally prohibit the sale in Russia of vehicles above a certain price or those with larger engines, along with all electric vehicles and hybrids. Automakers from these regions have also pledged to end or significantly limit their business in Russia.
Overall, these efforts have reduced Russian sales of vehicles from the sanctioned regions from more than a million in 2021 to about an eighth of that, Autostat data shows.
But sales of German and Japanese cars made in China are rising, the data show, a trend that some industry analysts attribute to rising exports of used cars with zero mileage.
These vehicles do not appear in some industry datasets; research firm GlobalData, for example, has not reported official sales of new cars of German brands in Russia this year. Autostat data, however, captures these sales because it is based on new car registrations in Russia, where imported vehicles with zero mileage are considered new, regardless of whether they were previously registered in China.
Almost 30,000 Toyotas were purchased in Russia last year, according to Autostat data. Almost 24,000 of them were produced in China. Almost 7,000 Mazdas were sold during the same period, almost all made in China. Hybrids from brands including Toyota are among the most popular Japanese models in Russia, according to two Chinese auto retail sources.
German luxury SUVs go through gray market channels
German cars are also popular. Autostat figures showed that nearly 47,000 new BMW, Mercedes and Volkswagen Group vehicles, including the Audi, Porsche and Skoda brands, were registered in Russia last year.
More than 20,000 of these vehicles were made in China, the data show. The rest were produced in Europe, but many likely passed through China on their way to Russia, according to industry analysts and one person involved in importing vehicles to Russia. Vladimir, the Russian car dealer, said most foreign cars are imported through China, regardless of where they are built.
A popular model among the Russian elite: the Mercedes G-class, an off-road vehicle that can sell for about 120,000 euros, or about $142,700, and is made only in Austria, said Felipe Munoz, an analyst who runs the Auto Industry Analysis platform.
Dozens of shipping documents reviewed by Reuters showed other examples of German luxury SUVs imported to Russia from China, including the Mercedes GLC 300 and BMW X1 xDrive25i.
“Given the trade between Russia and China – which has grown significantly in recent years in terms of cars – it is obvious to conclude that many of those cars imported into China from Germany end up in Russia,” Munoz said.
(Reporting by Alessandro Parodi in Gdansk, Gleb Stolyarov, Alexandr Reshetnikov, Zhang Yan in Shanghai and Rachel More in Berlin; Additional reporting by Chenxi Yang in Shanghai, Hyunjoo Jin in Seoul, David Dolan and Maki Shiraki in Tokyo, Maria Rugamer in Gdansk, David Lawder in Washington; Editing by David Lawder in Washington; Brianraw The Matt Scuff.
