To make up for lost sales and production, imports of Chinese vehicles are being increased, and Russia has signed an agreement to import vehicles from Iran. Efforts also are underway to shore up local production.
A delegation of GM officials led by Shilpan Amin, GM International president, recently traveled to Uzbekistan and signed a series of agreements expanding cooperation between the U.S. automaker and UzAuto.
Dearborn, MI-based Ford says it completed the transfer of its 49% stake in the Sollers Ford JV to Sollers for “nominal value.” Ford suspended operations in Russia on March 2, a week after Russia invaded Ukraine.
The main objectives of the new government strategy are to stimulate demand for cars among Russian consumers and to achieve 80% localization of vehicle and vehicle components production.
Media reports indicate Volkswagen has begun a search for bidders for its flagship Russian plant in Kaluga, while Mercedes-Benz is looking to shed its inventory of unsold cars in the country.
As Russia’s military conflict with Ukraine continues, some companies are scaling back operations in the country and others are looking to maintain or expand their presence in former Soviet Union satellites.
Conditions continue to deteriorate in the Russian automotive industry as government intervenes in an effort to prop up vehicle and parts supplies cut off due to war-related sanctions.
While General Motors becomes the first foreign automaker to leave Russia since the Ukraine conflict began Feb. 24, others are reassessing their Russian operations.
Analysts say if Western sanctions and embargoes remain in effect, South Korean and Chinese automakers could increase exports to Russia – possibly giving the companies more than half of the market by summer.