More automakers suspend or limit operations in Russia

Global auto and truck makers have suspended some business in Russia following that country’s invasion of Ukraine.

Russian forces invaded Ukraine last week, marking the biggest attack by one state against another in Europe since World War II. Many firms have idled operations in Russia following Western sanctions against Russia. Here are the latest updates:

Hyundai Group:

Hyundai Motor will suspend its car assembly plant in Russia’s St Petersburg on March 1-5 due to supply chain interruptions, Interfax newsagency reported on Tuesday, citing a company official for the South Korean company in Russia.

Mitsubishi:

Mitsubishi Motors said on Tuesday that it may suspend production and sale of its cars in Russia as economic sanctions imposed on Russia could trigger supply chain disruptions.

Japanese trading house Mitsubishi Corp owns 141 Mitsubishi dealerships in Russia, according to its website.

Volvo:

Swedish automaker Volvo Cars said it would suspend car shipments to the Russian market until further notice, becoming the first international automaker to do so as sanctions over the invasion continue to bite.

In a statement, the company said it had made the decision because of “potential risks associated with trading material with Russia, including the sanctions imposed by the EU and US.”

“Volvo Cars will not deliver any cars to the Russian market until further notice,” it said.

A Volvo spokesman said the carmaker exports vehicles to Russia from plants in Sweden, China and the United States. This came as Russia warned Sweden and Finland not to join NATO or risk facing “serious military-political consequences.”

Volvo sold around 9,000 cars in Russia in 2021, based on industry data.

Meanwhile, Swedish truck maker AB Volvo said it has halted all production and sales in Russia due to the crisis. It generates about 3% of its sales in Russia and has a factory there.

“We now have a bit more clarity on sanctions and security in the region … this means all operations in Russia end,” a company spokesperson told Reuters, adding the measures would apply until further notice.

Volkswagen Group: 

Volkswagen warned of production cuts at some of its plants including the one in Wolfsburg as Ukraine-based suppliers have been facing difficulties delivering after Russia’s invasion.

The company said it would likely be unable to produce at its Wolfsburg plant in the week of March 14 as a result, adding the factory would already produce less from the week of March 6.

The group also said it had temporarily halted production of Volkswagen brand electric vehicles at its Zwickau and Dresden plants this week and could not rule out further production adjustments.

Earlier in the week, Volkswagen temporarily suspended deliveries of cars to dealers until further notice. “Deliveries are to resume as soon as the effects of the sanctions imposed by the European Union and the United States have been clarified,” a VW spokesperson said.

VW previously said it would halt production for a few days this week at two German factories after a delay in getting parts made in Ukraine.

Czech carmaker Skoda Auto, part of Volkswagen, will limit some production at its domestic plants due to supply shortages after Russia’s invasion of Ukraine, while it said its Russian operations were still running.

“Due to the current situation in Ukraine, Skoda Auto is facing critical supply shortages of parts from several local suppliers that have effect on some of our models,” it said.

“This is the reason why we will limit production of the ENYAQ iV from this week on.”

Skoda said its supply chain consisted of a number of suppliers in western Ukraine.

The Czech carmaker said production was still running at its two plants in Russia, which has been hit by Western sanctions for its invasion of Ukraine.

Answering a question on any impact on production and operations in the event of further sanctions on Russia, Skoda said: “Impacts can certainly be expected, but the final decision and future direction will be determined by the (Skoda Auto board) and in consultation with the Volkswagen Group.”

Russia was Skoda’s second-largest market in 2021, with over 90,000 vehicles delivered. Ukraine has also been a stable market, it said.

“The sales strategy in Russia and Ukraine is currently the subject of intensive discussions. Sales in both Ukraine and Russia can be expected to fall in view of recent developments,” Skoda said.

Earlier on Monday, RIA news agency reported Volkswagen had temporarily suspended deliveries of cars already in Russia to local dealerships, citing a company statement. VW had no immediate comment when contacted by Reuters.

Daimler/Mercedes-Benz:

Daimler Truck said on Monday it would freeze its business activities in Russia with immediate effect, including its cooperation with Russian truck maker Kamaz.

Mercedes-Benz Group is also looking into legal options to divest its 15% stake in Kamaz as quickly as possible, the Handelsblatt newspaper reported.

A Mercedes spokesperson told Reuters business activities would have to be re-evaluated in light of the current events.

Mercedes-Benz Group, formerly Daimler AG, was the parent company of Daimler Truck before the truck maker was spun off.

Ford:

Ford, which has a 50% stake in three Russian plants, previously said it was working to manage any impacts on its operations but its primary focus was the safety of its employees in the region.

General Motors:

GM said it would suspend all vehicle exports to Russia until further notice. The Detroit company does not have plants in Russia, only sells about 3,000 vehicles annually there and has limited supply-chain exposure.

“Our thoughts are with the people of Ukraine at this time,” Gm said in a statement. “The loss of life is a tragedy and our overriding concern is for the safety of people in the region.”

Others:

Harley-Davidson has suspended its business and shipments of its bikes to Russia following the country’s invasion of Ukraine last week.

U.S. truck engine maker Cummins declined to discuss its relationship with Kamaz, but said it expected “some impact” to its business in Russia without providing further details. In 2006, Cummins agreed to produce engines for Kamaz’s fleet of trucks, buses and other heavy machinery.

Canadian auto-parts maker Magna International, which houses six manufacturing facilities and roughly 2,500 employees in Russia, said its operations were currently running and it would continue to monitor the situation.

Last week, several automakers and suppliers, including Renault and tire maker Nokia Tyres, idled production following the invasion. Parts makers Aptiv shifted high-volume work out of Ukraine, and Japan’s Sumitomo Electric Industries suspended operations there.

Energy giant BP Plc, Russia’s biggest foreign investor, abruptly announced over the weekend it was abandoning its 20% stake in state-controlled Rosneft at a cost of up to $25 billion.

Material from Reuters was used in this report.