War in Ukrainewith the Russia which is clearly the intrusive force, caused a financial and industrial earthquake amidst the bombs. While the suffering for Ukrainian civilians is unspeakable and unbearable, Russia could pay a very hard price economically given that the multinationals, including those of the carthey are disengaging from local businesses. Some removals will be temporary, others may be permanent. Furthermore, as economic sanctions increase, closings and contract breaks are likely to increase. Let’s take stock on the isolation from Russia by the major international automotive groups.
Several brands have stopped the sales. Volvo it was the first, curiously: Sweden has been threatened by Russia over NATO involvement, but the owner is Chinese. Daimler Truck, a relative of Mercedes, followed (also interrupting the relationship with Kamaz). We then count the Volkswagen Group, Jaguar Land Rover, General Motors, BMW, Ford, Nissan, Toyota, Aston Martin.
There are also consequences on production in other countries, given that Russia and Ukraine had plants dedicated to components in operation. Audi, Porsche and Volkswagen had to stop or slow down production, as did Stellantis. Mercedes and BMW also talked about supply chain problems. They produce in Russia, among others, Renault (which holds the majority of AvtoVaz, whose main brand is Lada), Stellantis, Volkswagen, Mercedes, Toyota, Hyundai. Most of the factories related to the aforementioned brands have stopped production until further notice.
The German company Leoni AG produces electric cables in Ukraine for several European car manufacturers: the closure of its two local plants could lead to further delays. And there is no idea how the conflict will go and how long it will continue.
According to the German study institute Center of Automotive Management (CAM), “for some time, at least for the duration of the conflict, Russia will not be an important sales market and place of production for the automotive industry. Assets of automakers and suppliers in Russia could lose significant value. The auto industry will not make major investments in Russia for many years to come“.
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