As the war between Russia and Ukraine prolongs, supply disruptions at local auto production plants are in full swing. Supply constraints are getting tighter, and car production and shipments are being delayed. In particular, the decline in sales of Russian cars is spreading to other markets, which will bring huge revenue losses to the automotive industry.
According to data and analytics firm GlobalData, assuming the average global car price is $30,000, the loss from declining sales will reach $100 billion in 2022 alone. Since China has not directly sanctioned Russia. As a result, Chinese parts suppliers will accelerate supply to the Russian market, possibly twice as much as in 2021, to replace the withdrawal of Western auto brands.
Other device manufacturers who choose to remain active in Russia could also benefit, although the market has shrunk significantly. But Russia still has good car manufacturing capabilities. Among The Russian automakers, the top three are Renault-Nissan, Hyundai-Kia and Volkswagen Group. They will produce 580,000 units, 397,000 units and 173,000 units in Russia in 2021.
GlobalData, a data and analytics firm, predicts that Russia accounts for a third of global palladium supply and that the price of such commodities is likely to rise due to the recent crisis.
Since the Russian-Ukrainian conflict, many automakers have begun to impose sanctions on Russia, either to stop exporting cars to Russia or to stop production in Russian car factories.
-Toyota, which produces approximately 98,000 units a year, stopped producing and importing cars at its St. Petersburg plant due to supply chain disruptions.
-The Company has been manufacturing and selling commercial vans in Russia, but has stopped operating.
-The Company has ceased production at its Kaluga plants and Nizhny Novgorod plants. It also stopped exporting cars to Russia. Volkswagen will sell about 190,000 vehicles in the Russian market in 2021, with a market share of 11.9%. Of these, about 170,000 were produced at the Russian plant.
-The Company has also decided to suspend exports and local production of cars and vans in Russia.
-Daimler Freight Holdings has also suspended all operations in Russia.
In addition, Scania and Volvo have ceased operations in Russia. Scania stopped transporting cars and spare parts, and Volvo stopped selling new cars. Honda, Nissan and Subaru also decided to stop exporting cars and motorcycles to Russia, while Mazda stopped exporting parts to Russia.
Stellantis stopped exporting cars to Russia and stopped transporting vehicles to Russia from overseas. Jaguar Land Rover has also stopped delivering vehicles to Russia. Ferrari and Lamborghini have decided not to produce luxury sports cars for sale in Russia.
Given the high costs involved, Renault is the only automaker that has not withdrawn or ceased operations in Russia to avoid the confiscation of the Volga auto plant (Avtovaz). Renault owns a 68% stake in the Volga automobile plant (AvtoVaz).