The international sanctions are intended to shut down the automotive industry in Moscow, used until now by large groups as an indispensable valve for the expansion of sales in the wider European area: the industrial plans will now change
Gianluigi Giannetti
February 28th
Russia is not China, obvious but not trivial. The war in Ukraine highlights the strategic rather than economic importance of the Moscow car market, where there is no rampant growth of the middle class and therefore the prospect of an expansion in consumption. Russia has been considered in recent years above all as an important appendix to increase the total sales of European automotive groups: presiding over the far east of the Old Continent was for everyone only an accounting move, but almost indispensable. The blocking of financial transactions and the slowdown of normal commercial links now pose a problem for the manufacturers involved. Development plans must be rewritten, much more important than a market that in 2021 recorded approximately 1.67 million cars and light commercial vehicles sold, a very slight increase compared to 2020, but with a substantial stalemate which has now continued since 2015. In Russia, there are a total of 34 production plants for cars and components, including those of brands such as Continental, Magna International and Visteon: the setbacks on this side of the new iron curtain are worrying.
renault
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The manufacturers with the highest sales in 2021 were the Hyundai – Kia group with approximately 380,000 imported vehicles, and Avtovaz-Lada with 351,000 units sold, but of Russian production. The Avtovaz group represents the largest foreign exhibition, as it has been controlled by Renault since 2017. A second plant on the outskirts of Moscow is added to the large Avtovaz plant in Togliatti, and for both of them there are already serious problems in the supply of electronic components from abroad. , with an initial suspension of production for two weeks. The future for the Avtovaz group seems very little rosy, despite the fact that in recent years we have gone far beyond iconic models such as the Lada Niva and aiming at a technical synergy with the Dacia brand cars. The precedent of the sanctions imposed on Iran in 2018 is a reminder of Renault’s rapid disengagement from Tehran and the joint venture with Idro, the Iranian state-controlled industrial giant.
Volkswagen and Stellantis
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The town of Kaluga, about 180 km southwest of Moscow, is an industrial center of excellence for the Russian automobile. In Kaluga, the Volkswagen group has a plant that produces the Tiguan SUV and the compact Polo, as well as the Skoda Rapid sedan, but there is also an assembly line for the Audi Q7 and Q8 Sport Utilities. Total production in 2021 reached 118 thousand vehicles and 150 thousand engines. Volkswagen has so far invested over a billion euros in the Kaluga plant, operational since 2007, and a total of over 2 billion euros, including the second production center in Nizhny Novgorod, in partnership with the local manufacturer Gaz, where they are built. Volkswagen and Skoda brand models. Stellantis is still operational in Kaluga, with a production capacity of 125,000 vehicles per year used to make light commercial vehicles such as Peugeot Expert, Opel Vivaro and Citroën Jumpy: in the most recent plans there was the desire to export also to the markets Europeans.
Mercedes and BMW
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The luxury sector has also invested in recent years in a productive presence on the Russian market, albeit with much more cautious exposures. This is the case of Mercedes and its plant north of Moscow, which cost 250 million euros in 2019 and is intended for the assembly of the E-Class sedan and the large Sport Utility range. BMW, for its part, has had an operational partnership since 1999 with the local manufacturer Avtotor for the assembly of engines in Kaliningrad, while plans for the construction of a complete plant have been shelved in 2020. An exit strategy was already anticipated by Ford, that, after having built a plant in St. Petersburg in 2001, in 2019 chose to completely disengage from Russia, also ceasing the marketing of cars through the official network and maintaining a presence in the commercial vehicle sector in collaboration with the local brand Sollers.
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