Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
    • Browse photos from the 2021 awards ceremony
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Battery testing center for large battery packs and more
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Ukraine crisis
February 25, 2022 03:23 PM

VW, Renault idle production following Russia's invasion of Ukraine

VW, Renault idle production following Russia's invasion

Reuters
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Volkswagen VW Russia Kaluga factory

    Volkswagen Group's factory in Kaluga, southwest of Moscow. The city has become a hub of auto production in Russia, with Stellantis and major suppliers also having facilities there.

    Several companies, including automakers Volkswagen Group and Renault and tiremaker Nokian Tyres on Friday outlined plans to pause or shift manufacturing operations following Russia's invasion of Ukraine.

    Volkswagen said it would pause production for a few days at two German factories after a delay in getting parts made in Ukraine.

    Renault said it would suspend some operations at its car assembly plants in Russia next week due to logistics bottlenecks caused by parts shortages. It did not specify whether its supply chain had been hit by the conflict, but a spokeswoman said the action was a consequence of reinforced borders between Russia and neighboring countries through which parts are carried by truck.

    The automaker is among Western companies most exposed to Russia, where it makes 8 percent of its core earnings according to Citibank.

    "Interruptions are primarily caused by tighter border controls in transit countries and the forced need to change a number of established logistics routes," the company's Russian unit AvtoVAZ, said without naming any countries.

    AvtoVAZ, controlled by Renault, also said it might suspend some assembly lines at a plant in central Russia for one day, on Monday, due to a persistent global shortage of electronic components. AvtoVAZ also did not mention the invasion in its statement.

    Finnish tiremaker Nokian said it was shifting production of some key product lines from Russia to Finland and the United States to prepare for possible further sanctions following the invasion.

    Ford Motor has a 50 percent joint venture in Ford Sollers, which has three assembly plants in Russia, according to the Ford website. Ford said in a statement it was "deeply concerned" about the situation and would "manage any effects" on its business in real time. The U.S. automaker also said it would follow any laws on trade sanctions, but declined to discuss whether the Sollers plants have been affected.

    After invading earlier this week, Russian forces pressed their advance on Friday as missiles pounded Kyiv and authorities said they were girding for an assault aimed at overthrowing the government.

    The United States announced sweeping export restrictions against Russia on Thursday, hammering its access to global exports of goods ranging from commercial electronics and computers to semiconductors and aircraft parts. That could lead companies to alter manufacturing plans or seek alternative supply lines.

    The invasion was a factor in consulting firms J.D. Power and LMC Automotive slashing their 2022 global new-car sales outlook by 400,000 vehicles to 85.8 million units. The auto industry had already been dealing with a tight supply of vehicles due to the global semiconductor shortage.

    "An already-tight supply of vehicles and high prices across the globe will be under added pressure based on the severity and duration of the conflict in Ukraine," said Jeff Schuster, president of global vehicle forecasts at LMC.

    "Rising oil and aluminum prices will likely affect consumers' willingness and ability to purchase vehicles, even if inventory improves," he added. "We have made significant downgrades to the Ukraine and Russia forecasts due to the escalating conflict between the two and the repercussions associated with sanctions against Russia."

    The conflict could boost oil prices above $100 a barrel, which would add inflationary pressure on European and American consumers, Wells Fargo analyst Colin Langan said in a research note. While consumers have been willing to pay above sticker price to get new vehicles, sustained higher gas prices could impact long-term recovery, he said.

    Aptiv CEO Kevin Clark said on Thursday that over the last couple of months the U.S. auto parts maker had swapped high-volume parts work out of Ukraine in favor of lower-volume products "so we were better-positioned to manage disruption."

    Japanese auto supplier Sumitomo Electric Industries, which employs some 6,000 people in Ukraine to make wire harnesses, said it suspended operations at its factories there and was talking to clients about potentially substituting supplies from other places.

    Japan's biggest steelmaker, Nippon Steel, said on Friday it would secure alternatives for a raw material it buys from Russia and Ukraine in the event of any supply disruptions.

    Nippon Steel buys 14 percent of its iron ore pellets, small balls of iron ore powder used in steel production, from those countries. Officials said it switched sourcing to Brazil and Australia and the impact should be minimal.

    RECOMMENDED FOR YOU
    Renault to invest $377 million in Brazil
    Recommended for You
    Renault
    Renault to invest $377 million in Brazil
    Aston Martin Valkyrie
    Aston Martin draws investor interest from Saudi Arabia, report says
    Lamborghini Urus offroad
    Lamborghini to invest at least $1.8B in path toward electrification, report says
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
        • Browse photos from the 2021 awards ceremony
    • More
      • Publishing Partners
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Battery testing center for large battery packs and more
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us