The Japanese automaker is finally giving up production in Russia.
(Photo: Reuters)
Dusseldorf The exodus of the major western automakers from Russia is entering the next round. With Toyota, the first Japanese manufacturer is now also ending its Russian production in St. Petersburg. Mazda is also considering withdrawing. Renault said goodbye to Russia in May, and Volkswagen has also given up part of its Russian business.
Like most other Western automakers, Toyota shut down production in St. Petersburg as early as March, shortly after the start of the Russian invasion of Ukraine. The reason for this was the lack of parts. Above all, suppliers from Western Europe could no longer deliver their parts to the Russian Toyota plant as usual. The world’s largest automaker had therefore initially suspended production – in the hope that it could be resumed later in the year.
But the Japanese company has finally given up this hope. “After six months we have not been able to resume normal business. We don’t see any indication that we could start again in the future,” said a spokesman for Toyota Motor Europe (TME) over the weekend in Brussels.
The Toyota factory in Russia’s second largest city, with an annual capacity of around 100,000 vehicles and around 2,000 employees, started production at the end of 2007. Around 80,000 vehicles were manufactured there last year. Toyota has produced the Camry sedan and the RAV4 SUV model in Russia. A local investor may now be found for the plant.
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Toyota does not want to give up the Russian sales organization in Moscow for the time being. “We will continue to support our dealer network,” added the TME spokesman. However, the sales base in the Russian capital must be “optimized and restructured”. From Moscow, Toyota also wants to ensure that the customers of the Japanese car company continue to be supplied with spare parts for their vehicles as far as possible, despite the Ukraine conflict and despite existing economic sanctions.
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“We didn’t take the decision to give up production in Russia lightly,” emphasized the Toyota spokesman. The Japanese manufacturer will now work to ensure that its 2,000 employees from the abandoned factory can find employment elsewhere. Toyota wants to help with possible retraining and also gives money for it – “more than the legal requirements require”.
Mazda is also considering withdrawing
According to a report in the Japanese daily newspaper “Nikkei” over the weekend, Mazda, the smaller Toyota competitor, is also considering giving up production in Russia. Mazda, together with its Russian joint venture partner Sollers, runs a car factory far in the east of the country in Vladivostok on the Pacific. Mazda initially did not want to comment on the newspaper report. Supplier parts are also missing in the Far East of Russia; regular production is no longer possible.
The Japanese car manufacturers are following numerous Western companies that gave up their production in Russia as a result of the military attack on Ukraine a few months ago. The French Renault group had already withdrawn from Russia in May and handed over its stake in the Avtovaz (“Lada”) joint venture to the Russian authorities. As a result, Renault had to write off more than two billion euros.
Volkswagen ended its joint venture with Russian automaker GAZ, which belongs to the empire of oligarch Oleg Deripaska, in early June. In the industrial city of Nizhny Novgorod east of Moscow, the two companies had been producing VW and Skoda models together for a good ten years.
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The VW Group employed around 200 of its own staff in Nizhny Novgorod. The German car manufacturer had presented a severance package for these employees. Anyone who left the company voluntarily was paid their VW salary until the end of the year.
The situation in Kaluga south of Moscow, where Volkswagen operates its own car plant with around 4,000 employees, is still unclear. Production has also been at a standstill there since the beginning of the war. Volkswagen could follow a path similar to that of its competitor Toyota and stop production altogether.
A Volkswagen subsidiary has already completely withdrawn from Russia and completely given up sales there. In mid-September, the VW truck division Traton (“MAN”, “Scania”) announced its withdrawal from the Russian market. Two sales companies were taken over by investors from Russia. Traton was left with a book loss of around half a billion euros.
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