The latest on western automotive operations in Russia

UPDATE, April 22: Stellantis suspends production in Russia, Continental resumes operations

The ongoing invasion of Ukraine by Russia has resulted in more automotive manufacturers leaving the country, with Stellantis announcing its suspension of Russian operations.

Stellantis, which owns Peugeot, Citroёn, Jeep, Fiat and Opel, is pausing production and sales of each brand in Russia, a country in which it holds just a one per cent stake of the new car market.

"Given the rapid daily increase in cross sanctions and logistical difficulties, Stellantis has suspended its manufacturing operations in Kaluga [Russia] to ensure full compliance with all cross sanctions and to protect its employees," the manufacturer said.

"Stellantis condemns violence and supports all actions capable of restoring peace."

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Meanwhile, tyre manufacturer Continental has restarted production in Russia, with Automotive News Europe reporting the German brand is claiming the decision is to protect its local workers.

"Our employees and managers in Russia face severe criminal consequences should we refrain from serving local demand," Continental told the publication.

"In order to protect our employees in Russia from prosecution, we are temporarily resuming the production of passenger tyres for the local market at our tyre plant in Kaluga if necessary.

"The basis for this step is the duty of care for our employees in Russia."

It is understood the tyres it produces will be made for civilian passenger vehicle use only.

The story to here

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March 24: Renault pulls out of Russia following international backlash

Renault has announced it suspended its operations in Russia, a week after it resumed production in the country.

Despite supply-chain difficulties, the company had been attempting to restart work at its Renault and Avtovaz plants since last Wednesday, conspicuously remaining the only automotive giant to persevere with its Russian operations.

However, Renault did a backflip this week after Ukraine President Volodymyr Zelenskyy called out the brand – which France owns 15 per cent of – in an address to French lawmakers.

“French companies must leave the Russian market," Zelenskyy said in a video address, reports Politico, criticising Renault and other companies for "sponsoring the Russian war machine”.

Many commentators online had called for a boycott of Renault products throughout the world in recent days in response to the perceived inaction from the French carmaker.

“Renault Group activities in its manufacturing plant in Moscow are suspended as of today,” the company said in a statement released overnight.

“Renault Group reminds that it already implements the necessary measures to comply with international sanctions.”

The company said it was assessing its 67 per cent stake in Russian brand Avtovaz, “taking into account the current environment, while acting responsibly towards its 45,000 employees in Russia”.

As reported by WhichCar earlier this month, regardless of the stance it takes, Renault Group could end up losing its controlling stake to minority shareholder Rostec, with the country introducing laws that would allow it to seize foreign-owned assets from companies originating from “unfriendly states”.

Rostec is a state-owned defence company run by Sergey Chemezov – a known ally of Russian President Vladimir Putin.

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March 14: Suzuki and Infiniti exit Russia

Japanese manufacturers Suzuki and Infiniti have joined the list of automotive brands to exit Russia in the wake of the ongoing conflict with Ukraine.

As reported by Reuters, Suzuki's Hungarian plant has suspended exports to Russia and Ukraine, affecting the market which accounts for roughly 10,000 deliveries annually.

Suzuki has said it will continue production in Hungary, establishing a new goal of shifting affected orders to other markets, allowing its plant to keep up with planned production volumes.

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Infiniti has followed the lead of parent company Nissan by suspending the delivery of vehicles to the Russian market indefinitely, although stock at dealers still remains according to Kolesa.

A spokesperson for the Russian arm of the brand said it would be impossible for Infiniti to pull out of one of its most important markets, stating "leaving the market is not discussed".

Other manufacturers to suspend their operations in Russia include Nissan, Mercedes-Benz, Volkswagen, Porsche, Bentley, Honda, Mazda, Toyota, BMW, Ford, General Motors, Volvo, and Jaguar Land Rover.

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March 4: Nissan, Mercedes-Benz and Volkswagen pull out of Russia amid sanctions

Following widespread international sanctions against the nation, Nissan, Mercedes-Benz, and Volkswagen Group brands are the latest car manufacturers announcing suspended operations in Russia.

Volkswagen, Porsche, and Bentley have all halted vehicle exports into the country, while production at the company’s Russian factories producing Volkswagen and Skoda models have been stopped “with immediate effect”.

According to market intelligence firm Focus2Move, Russia sold 1.57 million vehicles in 2021 – a slight increase over 2020, but still down on pre-pandemic sales of 1.76 million in 2019.

Of the 1.57 million recorded sales in 2021, Nissan sold 53,000 vehicles, Automotive News Europe reports, while Volkswagen’s Russian sales have been listed at 216,000 for the year – accounting for 2.4 per cent of its global sales.

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Despite spending €250 million (AU$375 million) on a new Russian plant which opened in 2019, Mercedes-Benz has also suspended production, as well as stopping exports into the country.

Honda, which was scheduled to exit Russia this year, has also announced it has stopped vehicle exports – with local publication Kolesa reporting the company has closed its business earlier than planned.

According to Nikkei Asia, Mazda also plans to halt exports of parts, though Kolesa states the company’s Vladivostok plant is still operating at this time.

While many car companies have cited Russia’s actions in Ukraine as reason for stopping sales and manufacturing, some insiders have said difficulty in shipping and receiving payments has contributed to the announcements.

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March 3: Toyota halts Russian production

Toyota has announced it will halt production at its Russian factory later this week, with vehicle imports into the country also being paused until further notice.

Toyota joins BMW, Ford, General Motors, Volvo, and Jaguar Land Rover who have also announced the suspension of operations in Russia this week.

While some carmakers were outwardly critical of Russia, Toyota cited supply-chain disruptions for the decision.

“Like everyone around the world, Toyota is watching the ongoing developments in Ukraine with great concern for the safety of [the] people and hopes for a safe return to peace as soon as possible,” a statement from the company read.

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March 2: Automotive manufacturers begin Russia exodus

A growing number of car manufacturers are suspending operations in Russia in response to the ongoing conflict in Ukraine.

BMW, Ford, General Motors, Volvo, and Jaguar Land Rover are among the companies halting new-car sales in Russia following widespread international sanctions on the country.

“GM is committed to complying with the laws and regulations of the markets in which we do business, including applicable US economic sanctions and export control laws and regulations," General Motors said in a statement, CNN reports, saying it would suspend exports to Russia until further notice.

Other carmakers weren’t as reserved: “The BMW Group condemns the aggression against Ukraine and follows the developments with great concern and dismay,” a translated statement from German website Bimmer Today read.

“We expressly support the sanctions decided by politicians. Due to the current geopolitical situation, we will stop our local production and export for the Russian market until further notice.”

While other businesses such as Harley-Davidson and Daimler Trucks have also announced similar measures, oil companies Shell and BP have gone a step further, abandoning joint ventures with their Russian counterparts.

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The decision to suspend sales in Russia may be easier for manufacturers like Volvo and Ford, which do not have a large presence in the country, but more painful for Renault Group – which counts Russia as its second-largest market after France.

Toyota also shut down its Japanese factories for 24 hours when a large parts manufacturer became victim to a crippling cyber attack, following the Japanese Government’s public statement of support for Ukraine, while announcing sanctions against Russia’s central bank.

Earlier this week, Volkswagen announced it would be forced to temporarily shut production at two of its German plants due to supply issues with parts suppliers located in Ukraine.