· Chinese trucks are pulled down in Russia due to the fall of the ruble exchange rate

On January 26th, the international rating agency Standard & Poor's announced that it would reduce Russia's sovereign credit rating to BB, which is the first time in 10 years that Russia's rating has fallen below the investment level. The ruble against the US dollar fell sharply by 7% to a low of 68.70 rubles, a record low in six weeks. Since the outbreak of the Ukrainian crisis, the West imposed sanctions on Russia and oil prices fell. The exchange rate of the ruble against the US dollar began to fall. Although Russia adopted a number of measures including raising the interest rate of the local currency, it still could not restrain the decline of the local currency.
The decline in the exchange rate of the ruble has had a negative impact on the export business of foreign truck companies including China. According to data from the National Statistics Office of the Russian Federation, the Russian truck market has shrunk by 15% last year and is expected to continue to fall this year. Liang Wei, deputy general manager of Shaanxi Automobile Import and Export Corporation, said that the decline in the exchange rate of the local currency against the US dollar in overseas markets has become an important factor affecting the overseas business of Chinese truck companies. Chinese truck companies should use both financial and non-financial countermeasures.
Ruble fell to lower the performance of truck companies in Russia
After the ruble against the US dollar exchange rate plummeted, Chinese passenger car companies bear the brunt of the losses. Geely Automobile announced that the depreciation of the ruble caused a large loss in foreign exchange exchange. As soon as the news came out, Geely's share price plummeted 22%. It is reported that Geely has begun to take measures to reduce the financial risks in Russia and began to increase the retail price of cars in Russia, hoping to reduce the impact of the devaluation of the ruble. In addition to passenger car companies, commercial vehicle companies are also facing losses in the Russian business. For example, Foton Motor sold 61 trucks in Russia in the first ten months of 2014. Compared with the ambition of the Russian market at the beginning of the year, sales were less. The FAW liberation, which has been selling more in Russia, sold 2,164 trucks in the first 10 months of 2014, down 42.1% compared with 3,739 vehicles in the same period in 2013. The relevant person in charge of FAW Jiefang Import and Export Co., Ltd. said that considering the truck sales in November and December 2014 will be greatly affected by the exchange rate of the ruble, the annual sales volume may fall by 50%. Shaanxi Automobile also has a certain sales volume in the Russian market, and has developed a relatively complete dealer system in Russia. However, a truck dealer named Shaokayev who came to China to attend the Shaanxi Automobile Business Annual Conference said that in 2014 The trucks sold are only half the amount in 2013 and will be less next year.
European truck companies with huge commercial interests in the Russian market are losing more. The decline in the exchange rate of the ruble and the stagnant economic growth in Russia have caused the decline in the performance of European truck companies. Volvo Trucks has a factory in Kaluga, Russia that can assemble 15,000 trucks a year. It is understood that Volvo is the only foreign truck manufacturer that invests in the production of cabs in Russia. The company also plans to invest in transmission and axle production plants in Russia. It is planned that by 2018, 45% of truck parts will be produced locally in Russia, an increase of 15 percentage points over now. As a result, the decline in sales of Volvo Trucks last year was even greater than that of European truck companies, down 37% year-on-year.
Authoritative analyst Autostat predicts that Volvo's competitor sales have also declined. Mann’s sales in Russia fell by 30%, and Scania also fell by 5%.
The exchange rate plummeted makes truck sales "loss of meaning"
Datang Investment, an automotive business analyst, pointed out that the negative impact of the ruble exchange rate decline on the truck business is as follows: First, the price of all imported goods, including trucks, rises, and as the ruble continues to fall, the price is getting higher. Second, Russia's economic growth has stagnated, inflation has increased the purchasing power of Russian users; third, after the truck transaction is settled in rubles, the value of the dollar or local currency has shrunk.
Sokayev said that after the exchange rate of the ruble fell, not only did the number of users buying cars be less, but the dealers themselves were not willing to sell cars easily. "A car can still sell 1.5 million rubles today. After the exchange rate falls, it will sell 1.6 million rubles tomorrow. Then, selling today is not worthwhile," said Sokayev.
The above-mentioned Datang Investment Analyst said that not only automobile products, but all imported goods have two negative effects due to the fall of the ruble exchange rate. First, the price of commodities rises. Second, due to the rising trend of prices, it is more cost-effective to sell later than early sales. . Therefore, the shelves of many Russian shopping malls are empty, and some Russian truck dealers also hang out the "vacation" and "renovation" brands, preferring to stock up and not selling cars.
Interacting with the rise of the RMB exchange rate affects truck exports
Compared with European truck companies, in addition to the decline of the ruble exchange rate in the Russian market, Chinese truck companies must also consider the issue of the reduction of profits caused by the rise of the RMB exchange rate. The exchange rate of the euro against the US dollar is basically falling, which is beneficial to exports. Liang Shuming said that the impact of the RMB exchange rate on truck import and export is a concern of many people. However, the exchange rate of local currency against the US dollar in overseas markets has a greater impact on the overseas business of Chinese truck companies. After the exchange reform, the overall operating trend of the renminbi is appreciation. Appreciation is conducive to enhancing the purchasing power of Chinese people to buy overseas goods, but it is not conducive to Chinese truck exports, because these trucks are expensive in overseas markets. Contrary to this trend, most of the world's markets, especially the major markets for Chinese truck exports, do not appreciate the local currency against the US dollar, but depreciate and the exchange rate falls. This has caused more serious consequences than the rise in the RMB exchange rate. The ruble down is a more prominent example.
First, in the case of a falling exchange rate of the ruble, the cost of buying a truck by local dealers and users has increased; secondly, even if the overseas investment is set up, if there are no supporting parts in the local area, the price of imported parts will increase. Once again, the ruble was exchanged for US dollars and then transferred by letter of credit, and the delay in payment became a need to pay more rubles. All this has prompted local potential customers in the Russian market to use one method as a countermeasure, that is, not buying or buying less imported Chinese trucks, reducing the amount of Chinese truck exports.

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