In the first nine months of this year, Chinese car exports to Russia plummeted by 58% compared to the same period last year, causing Russia to drop from the “largest export destination” to the third place. Mexico has replaced Russia as China’s top car export destination, but immediately announced plans to impose a maximum of 50% tariff on Chinese goods and initiated four anti-dumping investigations. The Chinese car export industry is facing unprecedented dual pressures.
According to data from the China Association of Automobile Manufacturers, in the first nine months of 2025, China exported 410,700 cars to Mexico, surpassing all other countries; the United Arab Emirates came in second with 367,800 cars, while Russia slipped to third place with 357,700 cars.
Just two years ago, Russia was China’s “number one destination” for car exports, but this year there was a dramatic 58% year-on-year drop in exports to Russia.
Wang Xiangyu, the founder of Yiwei New Energy Technology (Chengdu) Co., Ltd., revealed to the Daily Economic News that out of an order for 10 domestically produced new energy SUVs, only one has been delivered. The remaining vehicles might be abandoned at any time as customers are concerned about the high scrappage tax.
Liu Lei, Vice General Manager of Tianjin Shengtai Rentong International Trade Co., Ltd., said, “Previously, exporting a new energy car to Russia with a profit margin of tens of thousands was quite common.” Nowadays, some of his colleagues have suspended their Russian businesses, and his company is also reducing exports to Russia.
The rapid shrinkage of the Russian market stems from a series of policy adjustments.
Starting from October 1, 2024, Russia increased the scrap tax rate for new imported cars from 70% to 85%. In the used car sector, the scrap tax for cars with engine displacement of 2 to 3 liters and age over 3 years rose from 1.3 million rubles (about 114,000 yuan) to 2.37 million rubles (about 208,000 yuan), an increase of nearly 83%.
Effective January 1, 2025, Russia adjusted the import car duty coefficient to 20% to 38%, with the highest customs clearance fee for Chinese cars increasing by 30,000 rubles (about 2,637 yuan).
According to a list of September Russian car brand sales volume published by Zhongqi Data Research, sales of Chinese domestic brands collectively declined. Great Wall Motors’ brand Haval sold around 17,000 units in September, a decrease of 15.5% year-on-year; Geely’s sales were 9,741 units, down by 39.3%; Chery and Chang’an Motors both experienced a drop of around 50% in sales.
In the first quarter of 2025, out of 274 car showrooms closed in Russia, approximately 213 were Chinese car showrooms, accounting for 78%. Leading car companies are also shrinking their operations. Chery Motor, in its prospectus, explicitly disclosed: “In 2025, we will start to reduce our operations in Russia and have reached agreements to sell some local assets and distribution channels.”
Just as Chinese car manufacturers turned their attention to Mexico, new challenges emerged rapidly.
On September 10, the Mexican government submitted a tariff proposal to Congress, intending to impose tariffs of up to 50% on imported goods from China and other countries without a free trade agreement with Mexico.
The proposal affects goods worth up to $52 billion, accounting for 8.6% of all imports to Mexico. The Mexican Ministry of Economy estimates that this move will bring in approximately $3.76 billion in additional annual tax revenue for the government and preserve 325,000 industrial and manufacturing jobs.
In early October, the Mexican Ministry of Economy initiated four anti-dumping investigations on Chinese products, including float glass, self-adhesive tape, polyvinyl chloride-coated fabrics, and steel bolts. So far this year, Mexico has launched a total of 11 anti-dumping investigations on Chinese products, nearly double the number of cases filed last year.
The automotive industry is one of the hardest-hit sectors. Mexican Economy Minister Marcelo Ebrard stated that Mexico currently imposes a 20% tariff on Asian imported cars, but is considering raising the tariff on imported Chinese cars to the maximum allowable level of 50% by the World Trade Organization.
According to a report from the Japanese consulting company MarkLines, Chinese brand cars accounted for 30% of Mexico’s total imported cars in 2023, with a market share of approximately 20% in the light vehicle market. The new tariffs will not only impact Chinese brands like BYD and Great Wall but also models produced in China by international car companies like General Motors, Ford, and Kia will face price hikes.
Mexico’s trade policy adjustments are closely related to the US-Mexico-Canada Agreement (USMCA) review scheduled for 2026. The agreement, a successor to the North American Free Trade Agreement, tightens localization requirements for the automotive industry and aims to restrict the entry of Chinese components into North America.
The Center for Strategic and International Studies in the United States analyzed that this review could evolve into a “re-negotiation”, focusing on rules of origin, regional security, and labor enforcement. US Trade Representative Katherine Tai warned that some countries only assemble products in Mexico and use the USMCA’s advantages to enter the US market without assuming corresponding obligations.