Trump’s proposed Ukraine peace deal signals major shifts in automotive logistics, reshaping markets in Russia, Europe, and China

Trump’s presidency continues rejigging the automotive logistics industry in multiple ways. The negotiated peace deal, (the details of which have not been released in full, but which is expected to involve substantial sanction relief) has already started shaping up the Russian automotive market.  

In February 2025, finished vehicle sales in Russia dropped by a staggering 24% compared with the previous year to 80,000 units, some of the lowest monthly levels in the last decade, the Russian Association of European Businesses calculated.  

One of the reasons for the downward trend is that Russian customers are hoping for a soon return of Western brands amid the negotiated peace deal, local analysts believe.  

“The drop in sales might happen because a large number of buyers postponing purchases in anticipation of a possible return of global brands,” commented Sergey Tselikov, director of Avtostat, a Moscow-based think tank.  

Russia’s automotive market awaits Western comeback

Sweeping Western sanctions imposed against Russia over the Ukraine conflict have become a game-changer for the global automotive industry, boosting the demand for Chinese finished vehicles and contributing to the EU automotive industry crisis.  

In 2023, China officially became the world’s largest finished vehicle exporter after sales to Russia surged by 593% compared with the previous year, reaching $11.6 billion that year, the official customs data showed. Nearly 15% of Chinese exports land in Russia, though the trade between two countries was not cloudless. 

Now, the tables are about to turn again, and the industry expects automotive brands from Europe, the US, Japan and South Korea to gradually return.  

“We believe that the departed automotive companies can resume sales in our country as soon as the relevant sanctions are lifted,” said Alexander Nikolaev, deputy director of sales department at Major, a prominent Russian automotive dealership, adding that foreign OEMs are expected to resume localised finished vehicle assembly in the country around 2027.  

Nearshoring strategies: Can OEMs reclaim lost ground?

Nearshoring will be one of the key topics on the agenda for the returning brands, market players believe. Pulling out from Russia in 2022-2023 and selling their assets in the country, several brands, including Hyundai, Kia, Renault, Nissan, and Mercedes-Benz, reserved a buy-back option, leaving a loophole to get back their production capacities, reminded Evgeny Zhitnukhin, commercial director of Fresh, a Russian finished vehicle marketplace.  

“I think that Hyundai, Kia and Toyota can be expected to return first. They are still in [high] demand among Russians, which is confirmed by the level of their sales on the secondary market,” Zhitnukhin noted.  

In 2021, auto makers from Korea, Japan and the EU jointly sold over 1m finished vehicles in Russia. The general consensus in the industry is that their sales potential is still huge.  

Russian logistics firms struggle amid crisis

The negotiated peace deal is also seen as the light at the end of the tunnel for the reeling Russian logistics industry.  

Nearly a third of Russian logistics companies are heading towards bankruptcy, according to a letter a group of Russian logistics firms filed to Russian Prime Minister Mikhail Mishustin in February 2025. Over the past few years, the industry has been caught between the hammer of rising costs and the anvil of falling tariffs and can barely make ends meet.  

According to Russian logistics platforms ATI.su service and AvtoGruzEx, over the past year, the cost of cargo delivery in the country climbed by 12%, and the average transportation tariffs dropped by 19%. In addition, the industry is suffering from a hike in the rate of utilisation fee by 75% to 80% last year, and extremely high Russian Central Bank’s key interest rate, which made the commercial loans virtually unaffordable.  

Will automotive transit through Russia be revived?

Besides, the Russian logistics industry is experiencing an acute shortage of automotive carriers. At the end of 2023, the Russian logistics industry had only a third of the fleet of automotive carriers it operated in 2021.  

In addition, the peace deal could revive the automotive transit through the Russian territory, which enjoyed growing popularity before 2022 and was used by Mercedes-Benz, BMW and Volvo, among others, commented a source familiar with the matter who wished not to be named.  

In 2021, 68% of westbound traffic and 82% of eastbound traffic moving between China and the EU went through Russia. Transit in both directions nearly came to a halt in 2022.  

“Over the past few years, alternative routes developed to bypass Russia lacked investments and noticeable developments, so they failed to offer similarly attractive tariffs and convenience,” the source said, assuming that from the infrastructure point of view, there are no obstacles for the transit to resume in the foreseeable future.