ROME – From Ferrari to Lamborghini, from the Volkswagen group to Toyota, the automotive world says no to the war in Ukraine by stopping production for the Russian market and suspending any activity linked to Moscow. In addition to the suspension of production towards Russia, the Maranello company has also decided to donate one million euros in solidarity with Ukrainian citizens, in funds destined for the Emilia-Romagna Region which, in collaboration with the Red Cross and UNHCR, will use them for humanitarian projects international organizations in support of Ukraine and for the reception of refugees in their own territory. In addition, aid will be donated to the Chernobyl Association of Maranello, Fiorano, Formigine – ONLUS to meet the needs of the Ukrainians who will be hosted in the area near the Company’s headquarters.
Major Japanese manufacturers, including Toyota, have asked their employees in Russia to leave the country to ensure their safety. After suspending operations at the St. Petersburg plant, the world‘s first auto manufacturer announced that it intends to evacuate thirty workers along with 20 of their families, in compliance with the guidelines issued by the Tokyo government, and the current situation of supply difficulties. of spare parts by local branches. Other four-wheel companies such as Mitsubishi, Nissan and Subaru are moving in the same direction.
Honda has decided to stop sending their cars to Russia due to difficulties in the payment system as, unlike Toyota, the cars are being transferred from the United States. Mazda, which sold around 30,000 cars in Russia in 2021, has announced that supplies of spare parts to a local company in Vladivostok (east) will end soon.
According to data from the Japanese Ministry of Finance, the automotive market and its related industries accounted for more than half of all Japanese exports to Russia in 2020. According to the research firm Teikoku Databank, about 347 Japanese companies were operating in Russia in February. , 45% of which are car manufacturers and related companies.
The same decision was made by Volkswagen which announced the stop of production in Russia at the Kaluga and Nizni Novgorod plants, at the same time stopping the export of vehicles to Russia with immediate effect. Stop production and export were also decided by Mercedes Benz.
The first to announce sanctions and closures to Russia was the Volvo which in 2021 had sold 9,000 cars. The Swedish car brand, in an e-mailed statement on February 28, said it made the decision because of “potential risks associated with material trading with Russia, including EU and US sanctions not to to deliver any more cars to the Russian market until further notice. “
A list that immediately expanded with Russian dealers who began receiving announcements of interruptions to order shipments from Volkswagen, Audi, Porsche, Skoda, the British Land Rover, General Motors and the commercial vehicle division of Daimler.
As for production in Russia, however, there are several manufacturers present with important factories such as Renault, Volkswagen, Stellantis, Hyundai and Kia. The Renault group, in particular, is the most exposed because it controls AvtoVAZ, the manufacturer of the Lada brand. Not only that, Russia is the second largest market for the French manufacturer after the home one. Stellantis has a plant in Kaluga resulting from a joint-venture between PSA and Mitsubishi.
In Kaluga there is also the Volkswagen group where it builds Tiguan, Polo, Skoda Rapid and engines, as well as assembling Audi Q7 and Q8 from kits sent from abroad. Volkswagen, which also has an agreement with GAZ to assemble Volkswagen and Skoda cars in its plant, has invested more than 2 billion in Russia, where it employs around 4,000 people. BMW is the first premium brand in the country (47,000 cars), where it has, however, given up its own settlement. Then there is Mercedes (45,000 cars) with a thousand workers in a plant near Moscow. Also present in Russia with their own factories are the Korean Hyundai and Kia, which in 2021 were the manufacturers with the highest sales, with about 380,000 vehicles.
The two largest American automakers, on the other hand, have been out of the Russian market for several years. Ford closed its operations, including a plant in St. Petersburg, in 2019. Through Sollers, however, it remained in charge of the commercial vehicle segment. While General Motors began to retire in 2015 and sold its remaining stake to Avtovaz, now controlled by Renault, in 2019.
But the impact of the war and sanctions on the automotive industry goes beyond the presence in Russia of the settlements of some foreign car manufacturers. Russia is one of the world‘s largest suppliers of several key metals for automobile manufacturing and the ongoing energy and digital transition. For example, with 11% of global production, it is the world‘s third-largest supplier of nickel, used in lithium-ion batteries, and is the world‘s largest producer of palladium. Specifically, it provides 40 percent of the palladium used in catalytic converters, which is found in all gas and diesel vehicles. Russia also extracts about 4% of the world‘s cobalt, another key ingredient in accumulators. In recent days, the price of nickel has risen to over $ 25,000 a ton, the highest price since 2011, while palladium has exceeded $ 2,400. The prices of aluminum, of which Russia is one of the world‘s largest suppliers, have also surged in recent days. And aluminum is found in the chassis and engine components of nearly every car built in the world. According to analysts, such price increases could raise the average cost of a new vehicle by about $ 150, which can become more than $ 200 for SUVs, pickups, or sports cars with larger engines.
But that’s not all, the current situation risks further aggravating the shortage of microchips. Much of the raw materials used to build semiconductors in fact come from Ukraine. For example, Ukraine is the world‘s largest producer of neon, which is crucial for the lasers used to make chips. And, according to Ukraine Invest, a government agency that promotes investment in Ukraine, the country is home to 22 foreign companies that collectively manage 38 factories of wiring, electronic parts, seats and other products for the auto industry. Due to delays in supplies from Ukraine, Volkswagen has stated that it will stop production for a few days at two German electric car plants, Zwickau and Dresden. The production of Vw, Audi and Cupra compact electric cars built on the group’s MEB platform will be affected.