Lada has stopped production in Russia due to sanctions for invading Ukraine

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Sanctions after the Russian invasion of Ukraine show their benefits in local production Lada cessation of work in Togliatti and Izhevsk on March 5, 9 and 11. A spokesman for AvtoVAZ said workers would either receive a partial income or go on vacation during a production freeze, and those employed in areas such as customer service would not be affected.

The AvtoVAZ plant in Togliatti, built on the banks of the Volga River, was self-sufficient during the Soviet era, but in recent decades the automaker has become increasingly dependent on parts outsourcing. As reported The Wall Street JournalMore than 20 percent of the parts needed to produce, including electronic components, come from outside Russia, making it impossible to continue working after the country was cut off from world trade. One of the main suppliers are the Romanian plants of the parent company Renault, where Dacia vehicles are produced.

Read also: Russia’s invasion of Ukraine could lead to a second wave of microchip shortages

According to the official Renault website, Lada has more than 300 dealerships in Russia and is represented in more than 20 countries with five families of models (Vesta, XRAY, Largus, Granta and Niva). In 2021, Lada 350,714 cars were sold in Russia, which accounts for 21 percent of new car sales in a country where Lada has been a leading force for more than 50 years.

This makes Russia the second largest market for the Renault Group after France: Lada took 12 percent of the French group’s total sales last year and earned the company $ 181 million. Predictably, the war in Ukraine has led to Renault shares losing 35 percent of their value since last month.

Last week AvtoVAZ declined to comment on the impact of the sanctions, saying they continue to monitor the situation. However, as long as the war continues, things will get worse for people and businesses on a much larger scale as the economies are interconnected. Sources from Russia claim that without the support of Renault AvtoVAZ it will take months or years to get back on its feet.

Most automakers have temporary stop the operation in Russia, including Hyundai, Ford and Volkswagen, with the Russian government threatening to nationalize their factories.

H / T yes Drive

Lada has stopped production in Russia due to sanctions for invading Ukraine

Source link Lada has stopped production in Russia due to sanctions for invading Ukraine