Japan will increase the prohibition of vehicle exports to Russia today.
The scaled-up ban is in line with G7 Hiroshima Summit in May where leaders agreed to strengthen sanctions on Russia over its ongoing invasion of Ukraine. Existing G7 sanctions had already seen Japan prohibit the export of luxury vehicles worth over $43,400 since April 2022. Today’s prohibition includes new and used vehicles over 1900cc as well as hybrid and electric vehicles.
The sanctions aim to close a loophole after figures showed the value of sanctions-exempt Japanese second-hand car exports to Russia surged last year to $204 million—the highest in a decade. Japanese cars are popular in Russia—of the $4.2 billion worth of Tokyo’s exports to Russia last year, half of that comprised vehicle exports. However, it was apparent that the Russian industry was bypassing existing G7 vehicle export prohibitions through the Japanese used vehicle market.
The new export restrictions will almost certainly see Russia rely more on Chinese vehicle imports. Indeed, early figures for 2023 already show a massive 540% increase in Chinese vehicle exports to Russia with expectations that China will be the source of 70% of Russia’s vehicle imports in the medium-term future.
Source : Foreign Brief