Chinese state-owned carmaker Chery Automobile is accelerating its global expansion, as it looks to grow without Russia to avoid sanction risks and Moscow’s protectionist policies.
Chery underscored its ambitions with a move to acquire production facilities in South Africa from ailing Japanese peer Nissan Motor, which is restructuring. Production in the UK is reportedly the next target, as Chery seeks a stronger foreign foothold to compensate for relentless competition in its home market.
The Chinese automaker sold a total of 2.8 million vehicles in 2025, up nearly 8% on the year. But as Chery’s overall monthly sales fell year-on-year in November and December, the necessity of cultivating new markets appears to have grown more urgent.
Gregor Williams, associate director of the China corporate advisory team at Rhodium Group, told Nikkei Asia that South Africa, a member of BRICS, was a logical target for Chery as it is “unlikely to be among the first markets to push back against Chinese automakers on grounds such as cybersecurity risks or links to Russia. Those concerns are less salient there.”
South Africa, in addition, has already shown an “appetite” for Chinese brands, which currently take up about 10% of the local vehicle market. And there is a basis for local car production there, which the local government traditionally uses tariffs to preserve, Williams said.
“The combination of relatively weak local-content requirements, the latent threat of tariffs and a highly price-sensitive consumer base makes South Africa an attractive and relatively low-friction market to enter or deepen their footprint,” he said.
Nissan’s announcement of the deal said the Chinese side will acquire its plant in Rosslyn, an industrial suburb of the South African administrative capital, Pretoria. The purchase includes land, buildings, other related assets and a nearby stamping plant, with the transaction to be completed by mid-2026, pending completion of necessary procedures.
While the Japanese company’s Africa president, Jordi Vila, was quoted as saying the agreement offers security for most existing employment and the supplier network, Chery remained muted on these matters.
Chery is also seeking more traction in Europe. The Financial Times reported that utilization of Jaguar Land Rover facilities in the UK is on the agenda for British Prime Minister Keir Starmer’s official visit to China, citing multiple sources. While the negotiations appear to be at an early stage, Peter Kyle, the UK’s business secretary, said London wants Chery to manufacture in the country and using Jaguar’s existing plant would be an option, according to the report.
Chery has been a 50-50 joint venture partner with Jaguar in China since 2012, producing Land Rover vehicles at a factory in the central Chinese city of Changshu.
The Chinese company had not responded to queries from Nikkei as of publication.
Chery is the first Chinese automaker to assemble cars in Western Europe, producing electric vehicles in Barcelona through a joint venture with local counterpart Ebro-EV Motors since December 2024. It took over an abandoned Nissan factory there, too.
Chery also has knockdown production arrangements in markets such as Indonesia, Brazil, and Uzbekistan. It already produces in Malaysia, an operation it plans to expand, and is preparing to start manufacturing in Thailand and Vietnam through joint ventures.
Of the HKD 10.4 billion (USD 1.3 billion) Chery raised in its IPO last September, including the partial exercising of the over-allotment option, the company declared it would allocate about a fifth to “expand overseas markets and execute our globalization strategy” in the next four years.
The IPO prospectus described a “two-pronged approach to build up our overseas production network,” meaning either engaging in contract manufacturing arrangements with local assemblers through knockdown agreements, or establishing its own production capabilities.
In the background of all this is the company’s stated decision to gradually surrender its largest market outside China: Russia.
The same prospectus revealed that company had decided to “downscale our operation and sales in Russia to mitigate sanctions risks.”
Chery was the top-selling Chinese automaker in Russia, trailing only storied local brand Lada until 2024. But while Chery sold around USD 6 billion worth of cars per year in Russia in 2023 and 2024, accounting for about 20% of its total revenue both times, the contribution of this lucrative market will become “negligible” by 2027, according to the group’s plan.
By last July, it said it had transferred its passenger vehicle inventories, associated warranty obligations and local distribution networks. Chery’s Russian sales dropped significantly in 2025, ceding second place to Chinese compatriot Great Wall Motor, which produces locally. According to ASM Holding, Chery’s sales in Russia fell by 37% to 99,936 units, while the decline was 82% in the month of December.
On top of sanctions, another concern driving Chery out of Russia was higher “recycling fees.” As Chery did not establish a local manufacturing base, its imports are subject to this one-time levy, which the Russian government says it charges to cover future costs of scrapping vehicles. The fees have been raised by 70–85%, depending on engine size, and are set to increase by a further 10–20% per annum in the coming years.
Now, for Chery, all roads lead elsewhere. On the reported pursuit of UK production, Rhodium’s Williams said the move, if it happens, would be “in line with Chery’s plans to reduce the sanction threat related to Russia.”
He views the possibility of a Jaguar deal as a clear sign that “Chery’s strategy points toward prioritizing advanced Western and middle-income economies.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.