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Article

30 Mar 2022

Author:
KENJI KAWASE, Nikkei Asia (Japan)

China's Great Wall Motor to stay in Russia market 'for time being' while oil conglomerate CNOOC ponders next move

"China's Great Wall Motor staying in Russia 'for time being'" 30 March 2022

China's biggest SUV maker, Great Wall Motor, says it has no immediate plans to exit Russia, its top overseas market, but warned that the Ukraine war and Western sanctions could force it to make "some adjustments."

Meanwhile, CNOOC, one of China's big three state-owned oil conglomerates, confirmed that its project in Russia remains intact, and that it is too early to comment on the company's next move in the country, including whether it is interested in filling the potential gap after some Western companies pull out.

Great Wall's board secretary, Xu Hui, said Wednesday that the company would stay in the country "for the time being," and was taking a long-term view of its more than 3 billion yuan ($472 million) investment in Russia, where Great Wall has its only overseas factory.

But he acknowledged that the conflict and potential impact of sanctions against companies doing business in Russia could prompt a shift -- after a string of international companies, including Apple, Ikea, McDonald's and Starbucks, halted sales in the country.

"We need to comprehensively consider and weigh how we should act, going forward," Xu said during an annual earnings conference call. "We may need to make some adjustments based on what kind of impact there is with regard to the war and the sanctions."

When pressed on the automaker's plans, Xu repeated that Great Wall would stay in Russia "for the time being."

There was still demand for Great Wall's cars, he added, despite a recent fall in sales as the ongoing conflict and a weak ruble weighed on demand. Russia is the automaker's biggest market outside China, where it generates about 90% of its sales. [...]

Part of the following timelines

Ukraine: Global outrage over Russian invasion leads to sanctions, demands for businesses to divest

Ukraine invasion: Companies with interests in Russian oil & gas forced to reassess operations