Almost 24 hours ago, the dreaded images of Russian soldiers and military vehicles were produced red-handedly crossing the border of neighboring Ukraine under the pretext of protecting ethnically Russian civilians. International sanctions will impact several car manufacturers.
Yesterday afternoon Vladimir Putinthe Russian president for more than 20 years -either directly or controlling Dmitry Medvedev-, addressed his nation to explain why he was going to invade the Ukraine, albeit in his own way. The justification is to protect the self-proclaimed republics of Donetsk and Lugansk, which only Russia has recognized.
Images of tanks crossing the border quickly aired on television and diplomacy is working overtime to avoid a major armed conflict. Ukraine considers that its sovereignty has been violated. Russia believes that it has to protect ethnic Russian citizens from breakaway republics.
The mess is already mounted. Both the European Union and the United States have announced severe measures that harm Russia without having to pull the trigger, through economic and trade sanctions. And among the many affected may be manufacturers such as Renault, Stellantis and Volkswagen, highly exposed in the Russian market, and not only them.
Stellantis factory in Kaluga (Russia)
A few days ago we told you that Stellantis plans to send vans to the European market from Russia could go to hell if sanctions are imposed. Not only that, it will affect the supply of parts in the opposite direction, Russian suppliers are not able to provide all the necessary parts.
Stellantis has a factory in Kaluga that operates together with Mitsubishi in a joint venture. Since 2017 the plant has been manufacturing PSA vans, which are fully integrated into the current Stellantis catalogue. Citroën, Opel and Peugeot versions are manufactured there, while the production of the equivalent Toyota and Fiat remains on French and Spanish soil.
A Stellantis spokeswoman reported to Automotive News that they are following the development of events and has not made any further statements. Most likely, the export of vans to Europe from Russia will have to be canceled indefinitely.
Lada Vesta, a local bestseller
Another big hit is Renault, the most exposed. Of the 10 best-selling models on the Russian market, half are made by the group. It must be remembered that AvtoVAZ (and its Lada brand) has been controlled by Renault for a long time, although the diamond brand is also present, the one that is not is Dacia -but its rebranded models are.
In the case of the Lada brand, the impact of the sanctions would be less, since the park of suppliers is located within the Russian borders. Virtually all Lada sales take place in the same Russian Federation, around 90%. As for AvtoVAZ, in principle it is self-sufficient. The most serious problem will be the supply of chips.
There are two factories of the Renault Group in Russia, the one in Togliatti and the one in Moscow. Since the diamond brand does not have a large presence in the Chinese market, Russia is its second most important market after France. Renault already had a bad experience in its return to Iran due to sanctions imposed on the Persians by the US for the intensification of its nuclear program.
The Volkswagen Polo is not only manufactured in Spain, it is also made locally for the Russian market
It also has a great exhibition Volkswagen Group. The Volkswagen Polo and Tiguan are produced within Russia, in addition to the Skoda Rapid. Imported in CKD kits, the Audi Q7 and Q8 arrived from Europe are also completed. In 2021, 118,000 cars were completed. They also have an industrial presence in Kaluga.
Apart from these manufacturers, we can mention BMWto Ford already Mercedes Benz, whose exposure to the Russian market is also industrial, not just sales. BMW has imported CKD since 1999, Ford has maintained van production alongside Sollers after closing several facilities, and Mercedes-Benz has been producing the E-Class and derivatives since 2019 near Moscow.
If it weren’t for the instability of recent years, the Russian market was one of the most interesting emerging markets in the world, with the potential to exceed 3 million units per year, but since 2013 sales have not raised their heads. The sanctions, if they come, will not help in this regard and will aggravate the Russian economic situation.