Page 131 - RusRPTAug22

9.1.2 Automotive sector news
In June 2021, Volkswagen was Russia’s fifth most popular car brand. It was selling tens of thousands of new vehicles a month, and the future looked rosy. Fast forward a year, and reports are beginning to emerge that the German auto giant is trying to sell its car assembly plant in the western Russian town of Kaluga.
Along with most other major carmakers, Volkswagen announced that production at its Russian sites would be suspended in March 2022. Western sanctions imposed following Russia's invasion of Ukraine slammed the brakes on Russia’s car production, depriving manufacturers of the tools and materials needed on the production line.
By May, only two of Russia’s 20 car plants were still working, and even they were operating at dramatically reduced capacity. Satellite images of the lot behind the Ford car plant in St Petersburg where new cars are stored showed it to be completely empty in July.
If the reports are true, Volkswagen will be following in the footsteps of a host of other Western carmakers who have decided that the difficulty of sourcing parts combined with dwindling domestic demand and the reputational damage of continuing business as normal has made operating in Russia unfeasible. Sources cited by
131 RUSSIA Country Report October 2020 www.intellinews.com