UK car industry rejects claim it's benefiting from sales to Russia

New Rolls-Royce and Bentley luxury cars are being exported to Russia in defiance of trade sanctions, Sky News reports.

These sanctions, imposed following Russia's 2022 invasion of Ukraine, ban the export of cars to the country. However, cars can still be exported to countries bordering it, including Azerbaijan, from where they're reportedly being sold into Russia.

The claim is based on an analysis of HMRC trade data. This shows that last year, the UK recorded a huge increase in the export of cars to Azerbaijan – up almost 2000% compared with the five-year period preceding the war to £273 million. Each of the vehicles was worth more than £100,000. Analysis of UN trade data then revealed an unprecedented increase in car exports from Azerbaijan to Russia.

UK car exports to Azerbaijan have continued, with £43m worth being sent last January to the country, making it the UK's 12th biggest foreign market by value for cars.

Autocar asked industry body the Society of Motor Manufacturers and Traders (SMMT) if it could explain Azerbaijan's sudden appetite for UK-made luxury cars.

A spokesperson said: “UK vehicle exports to Azerbaijan – as to many countries globally – have increased due to a number of factors, not least a flourishing economy, new model launches and pent-up demand, as apparent in the post-pandemic uplift in 2021, when exports almost quadrupled compared with 2019. Azerbaijan has generally been a market for Britain’s high-value manufacturers, so a small increase in volume can have a dramatic impact on the export value. Wherever the UK automotive industry exports, it is committed to compliance with all trade and economic sanctions and continues to work closely with government and the new Office For Sanctions to ensure the effective implementation of the regulations." 

The SMMT's claim that Azerbaijan's economy is 'flourishing' is despite the fact that the country ranks 84th in the world on GDP per capita, behind the UK at 27.

Although the HMRC and UN trade figures alone don't prove that British cars are being exported from Azerbaijan to Russia, Sky News sources have told it that Russians prefer to use this neighbouring state as a route for them.

Autocar has discovered that car brokers in Baku, the Azerbaijani capital, are advertising British luxury cars. One claimed it has partnerships all over the world and could supply new Rolls-Royces and Bentleys from the EU. 

Rolls-Royce said: "Rolls-Royce Motor Cars ceased production and supply of cars for the Russian market in late February 2022, before international trade sanctions were put in place. In the meantime, governments have implemented far-reaching sanctions, which we fully comply with and support.

"Retail sales of cars to clients are managed by our global dealer network, comprised of independently owned and operated businesses. Our global dealer network is contractually obliged to follow all applicable national and international legal regulations, including those relating to export control. If any new Rolls-Royce motor car has been imported into Russia since late February 2022, this has been done so without the knowledge or support of Rolls-Royce Motor Cars."

Bentley said: "We are committed to full compliance with all current and future trade sanctions, and there is no evidence to suggest a lack of compliance with existing sanctions or indeed a change of sales trend in Azerbaijan."

The UK government's Foreign, Commonwealth and Development Office told Autocar that it was working with EU and US partners to shut down "circumvention routes" in countries where it has seen "spikes" in the trade of sanctioned goods with Russia.