Russia may nationalize automakers’ assets amid Ukraine invasion

  • After nearly two years of supply chain problems, Russia’s invasion of Ukraine is causing more problems for automakers in Europe, in addition to the terrible human toll the invasion brings.
  • It turns out that Ukraine supplies a lot of wiring harnesses, and now the launch of the VW ID.5 EV in the European market (pictured above) is delayed due to A lack.
  • Renault, which controls Russia’s largest automaker, suspended operations in the country this week, once again raising questions about whether the Russian government will simply take control of factories and other assets whose automakers Western automobiles move away.

    Russia’s invasion of Ukraine continues to disrupt life well outside active combat zones. In the automotive world, European automakers have been forced to cut production or even delay new models because, as we have all learned so well over the past couple of years, the way supply chains work doesn’t is not exactly acquired.

    ID.5 assembly in Germany, January 2022.

    Olivier Killig/VW

    When the invasion started, the fact that Ukraine supplied a large quantity of wiring harnesses to European car manufacturers suddenly became important. Volkswagen said this week it would push back the launch of the ID.5 for a month because it can’t get enough harnesses to send demo vehicles to dealerships in Germany. The ID.5 is an SUV “coupé” version of the ID.4 and was due to launch in Europe in April. The launch is now scheduled for the first week of May, a VW spokesperson said. Automotive News. It’s so enough wire harnesses can be acquired.

    Automakers with partnerships or assets in Russia are also massively affected, including Renault. AvtoVaz is Russia’s largest automaker, but it is controlled by French automaker Renault, which has a 69% stake. This week, after much outside pressure, Renault decided to suspend operations in Russia, saying on Twitter that it “acts responsibly towards our 45,000 employees in the country” and that the company has “already implemented measures necessary to comply with international standards”. Sanctions” before the start of the suspension.

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    Renault’s suspension is the latest and greatest blow to the Russian auto market, which now faces potentially huge changes if sanctions imposed by Western and Western-aligned countries continue (as they likely will, given that Russia does not seem interested in stopping the massacre). Reuters reports Avtovaz said on Thursday it would continue to build vehicles, but the sanctioned supply chain means it will be difficult. “Active work is underway to replace certain critical imported components with alternative solutions,” Avtovaz said in a statement provided to Reuters. “The company is also preparing special versions of certain Lada models with reduced exposure to imported components. These will be available to our customers in the coming months.”

    Lada was forced to stop building cars earlier this month, a big step for a brand that sold 21% of all new vehicles in Russia in 2021, with Renault having taken at least the first step towards exiting of the company, it raises a larger question of what happens next. President Vladimir Putin plans to nationalize manufacturing plants and other assets of global automakers in Russia, such as Automotive News and others have reported. Besides Renault, Volkswagen, Stellantis, Ford and Mercedes-Benz would be the automakers most affected by any move to nationalize assets, a move sometimes described by Russian government officials as an “external administration”.

    “If foreign owners close the business unreasonably, in such cases the government proposes to introduce external administration,” Russian Prime Minister Mikhail Mishustin told CNN earlier this month. “According to the owner’s decision, this will determine the future fate of the business.”

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