Sanctions, shortages, production stops … The shock wave of Ukraine’s invasion by Russia begins to be felt in European automotive plants.
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of crisis in crisis, or to be more accurate, of global pandemic in military conflict … The automotive industry is undergoing a new major wave of destabilization, while COCI-19 and the shortage of semiconductors had already provoked historical production declines since 2020. After the shock wave of the virus, here is that the carriers of the car get to know a form of war economy triggered by the invasion of Ukraine by Russia, February 24th.
The epicenter of this new earthquake is obviously in the territory of the belligerents. And the most exposed manufacturer is found to be French Renault, who sells 500,000 cars in Russia and has three large factories, one for its brand near Moscow and two more in the fun of the historic manufacturer AVTOVAZ (Lada brand), of which The industrial tricolor is a majority shareholder (68% of the capital). The group in the diamond is the most “Russian” of the great industrialists of the car, with 40,000 employees and about fifty expatriates present in the country.
Renault had to stop the production of its Moscot site since the beginning of the week, because the parts of parts necessary for the manufacture no longer pass the border. In addition, AVTOVAZ, number one sales in Russia, announced, Thursday, March 3, the stop of its factories for four days “due to semiconductor supply problems”. The industrial tricolor is not the only one to see its Russian operations affected by the war. Always Thursday, Volkswagen, the first European builder, announced to stop his activities in Russia, where he has two production sites. Vehicle exports from the Russian Federation are interrupted, and no vehicle of the brands of the group will be delivered.
Logistics disturbances
Wednesday night, Mercedes had also announced that he put to death the production and export of vehicles assembled in Russia. Thursday, the Minister of the German Economy, Robert Habeck, welcomed the “whole support of companies on the sanctions imposed on Russia”. But there are also economic reasons for these decisions. After the exclusion of the Russian banks of the International SWIFT payment and communication system, the reliability of financial flows and supply chains from and to Russia is questioned.
Other consequence of the breath effect of the war, the Japanese Giant Toyota will stop his production on site “until further order” from Friday, March 4th, as well as its imports for this market, invoking ” disturbances of the supply chain “related to the Russian-Ukrainian conflict. The other Nippons builders seem to be part of the world’s leader’s footsteps. Suzuki, Honda and Mazda have already interrupted or reduces their modest activities in Russia.
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