The current situation caused by Russia’s invasion of Ukraine has created not only a security and political crisis, but also an economic one. Affected by the restrictions of Western countries, many companies that have plants in Russia have found themselves in a difficult situation. One of them is Renault, which announced that some production lines in AvtoVAZ will have to be shut down.
AvtoVAZ is part of Lada Auto Holding, which also manages a number of factories, with Renault being the majority owner with a 67.61% stake. Russia is Renault’s second largest market, just behind France. “Interruptions are caused by more rigorous border controls and the need to change logistics routes,” their official statement said. Interestingly, they did not state that the decision has anything to do with the invasion.
Renault is not the only carmaker to have invested in Russia. There are also Volkswagen and Stellantis. Volkswagen said that due to delays in the delivery of parts from Ukraine, the company was forced to stop production at two factories. Stellantis did not make any statements regarding the current situation.
Some companies have opted for drastic measures, such as Finnish tire manufacturer Nokian Tyres, which has said it will relocate its production of key product lines to its homeland.
Russia is also a producer of several essential metals for the auto industry, such as palladium (38%), aluminum (6%), and rhodium (the second largest producer in the world).
Source: Reuters / Renault Group
