by Western automakers raced for the exit following Russian President Vladimir Putin’s decision to invade Ukraine in February. Toyota and Volkswagen were among a series of companies that announced last month that they had halted production and exports to the country.
An opening for China?
Domestic car models like the AvtoVAZ-owned Lada – an icon of Soviet-era autonomy – could, in theory, benefit from the absence of foreign competition. But the sanctions have snarled supply chains, leading to severe parts shortages.
The company brought forward the company-wide summer vacation to April and announced it would move to a 4-day week for three months from June in an attempt to save more jobs. of 40,000 employees. The company says it is also designing new versions of several Lada models to be less dependent on imported parts.
Chinese automakers could capitalize on the departure of Western brands, said Carol Thomas, analyst for Central and Eastern Europe at consultancy LMC Automotive.
“Chinese brands will no doubt see the current situation as an opportunity and there is a chance that others will seek to establish a Russian production base in the future,” she said.
Chinese companies Great Wall Motors and Geely posted strong sales growth in Russia throughout the first quarter and suffered smaller losses than their Western rivals in March.
— Clare Sebastian and Chris Liakos contributed to this report.
