Automakers Stop Doing Business With Russia

Mar 7, 2022 3 min read
Automakers Stop Doing Business With Russia

The long-term effects on the automotive industry are yet to be determined…

Automakers are responding to the Russian invasion of Ukraine, many of them cutting all ties with the aggressor country. Others are rolling back operations or taking more diplomatic stances.

See what happened when a C8 Corvette hit a truck here.

Considering Sweden has been threatened by Russian officials recently, it’s not surprising to see Volvo was the first to take a stance, even though the company is now owned by the Chinese. The automaker stated it will not export any cars to Russia due to the sanctions and “potential risks associated with trading material with Russia.”

A GM spokesman told the media shortly after the Russian invasion of Ukraine that the automaker would be suspending operations in Russia. The reason cited was “a number of external factors, including supply chain issues and other matters beyond the company’s control.” GM made an effort to really penetrate the Russian market several years ago, but it fell flat and the company closed its manufacturing facilities there. Since then, the automaker has stuck to selling a few thousand Cadillacs and Chevrolets a year.

While Stellantis has stopped the manufacturing of vehicles at its sole Russian plant, it’s not because of a desire to punish the country for invading Ukraine. Instead, the automaker has been lacking parts to assembly vehicles, otherwise it would be continuing operations as normal. CEO Carlos Tavares said pulling out of the Russian market would only harm the Russian people and not Putin’s regime.

Toyota operates a factory in St. Petersburg, which the automaker says it is idling because of supply chain problems. The largest automaker in the world also announced it will stop the import of all vehicles to Russia. It’s suspected a cyberattack from Russia brought Toyota operations in Japan to a screeching halt last week.

Ford issued an official statement back on March 1, announcing it was suspending a Russian joint venture. In standing with Ukraine, Ford Fund is donating $100,000 to the Global Giving Ukraine Relief Fund, assisting with the humanitarian crisis as Ukrainian families are displaced. The Blue Oval also said it has “significantly” decreased its operations in Russia, which at this point only involves making commercial vans.

Honda was already in the process of leaving the Russian market before the invasion of Ukraine. With the sanction and shipping concerns, the Japanese automaker says it’s retreating faster than it had planned. Russians probably will barely notice considering Honda only sold 1,400 cars in the country last year. The company also has stopped selling general-purpose engines to Russia.

Mazda also plans to cease exports to Russia. Production is continuing at its joint-venture factory in eastern Russia, but eventually that facility will run out of parts.

Nissan announced it is suspending all business in Russia, including any vehicle exports to the country as well as stopping production at its factory in St. Petersburg. In addition, the automaker said it’s donating $2.75 million to Ukrainian relief efforts.

Volkswagen has temporarily stopped delivering cars to dealers in Russia as well as manufacturing cars in the country. Skoda, the Czech automaker which is owned by Volkswagen, has cut back on production in Russia because of parts shortages

Daimler Truck, which was spun off from Mercedes-Benz in 2021, stated it would suspend all business activities in Russia. That includes a joint venture with Russian truck manufacturer Kamaz.

Mercedes-Benz has stopped exporting cars to Russia and is stopping all manufacturing in the country. The automaker is reportedly looking at how to divest from Kamaz, in which it owns a 15 percent stake.

BMW has stopped making cars in Russia as well as exporting vehicles to the country. The same thing goes for Mini, which is owned by BMW. The company has only cited the “geopolitical situation” as a reason.

Also halting all exports to Russia, Jaguar Land Rover said the move was due to “trading challenges.” The Indian-owned British automaker said in a statement it would be “continually monitoring the situation.”

Taking a softer stance, Renault said it has suspended some activities in three of its plants located in Russia. The move isn’t in protest to the Ukrainian invasion, but rather the automaker cites “interruptions in supplies of components.” The French automaker assures its customers it will continue to sell cars in Russia. It’s not hard to see why Renault doesn’t want to go against Russia, considering 18 percent of its global sales were done in the country last year.

Sources: Detroit Free Press, BBC, Nikkei Asia, Fox Business, Reuters, CNN, The Wall Street Journal

Photo credit: GM

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