Ukraine Invasion Puts Russian Auto Industry in Limbo

ST. PETERSBURG – Foreign automakers are suspending operations in Russia in response to the country’s invasion of Ukraine. Some have stopped exporting cars to Russia as well.

According to German media reports, Daimler Truck will stop supplying components to KamAZ which, in addition to trucks and buses, produces equipment for the Russian army. Daimler also has a manufacturing joint venture with KamAZ that was established after Russia’s 2014 annexation of Crimea.

Daimler says it has no plans to divest its 15% stake in KamAZ, whose CEO, Sergei Kogogin, says operations will continue under a contingency plan developed with the Russian government.

Ford has shut down its manufacturing JV with Russian contract assembler Sollers (pictured, below) in the city of Yelabuga. Ford management will ensure “social obligations” to its employees during the forced downtime, the company says.

Ford Transit-Ford Sollers JV

BMW has announced the suspension of car production at the Autotor plant in Kaliningrad. The German automaker also has suspended deliveries to the Russian market.

Renault says it has suspended production until March 5.

The Japanese newspaper Nikkei reports Honda and Mazda plan to suspend exports of cars, motorcycles, auto parts and other products to Russia.

A third Japanese automaker, Mitsubishi, says it has reduced exports of auto parts to Russia from Japan and Thailand, which could shut down its JV with U.S.-European automaker Stellantis in the Kaluga region.

Volvo Truck has temporarily suspended production and sales in Russia. Volvo Cars, owned by Chinese automaker Geely, has halted exports to the country.

At the same time, global automakers have begun exporting Russia-built cars to other markets. This is happening in part because it has become unprofitable for them to sell their products in Russia due to devaluation of the ruble.

The weakened ruble also has prompted several automakers to begin suspending imports into Russia, including Volkswagen Group (Audi, Volkswagen, Skoda, Porsche), General Motors (Chevrolet, Cadillac) and Jaguar Land Rover.

The cutoff of imported auto parts may threaten the operations of Russian flagship automaker AvtoVaz.

According to some market sources, most foreign producers do not see an immediate resolution of the problems caused by trade sanctions stemming from the Ukraine attack. The situation is complicated by deepening problems with logistics.