by Western automakers balked after Russian President Vladimir Putin’s decision to invade Ukraine in February. Toyota and Volkswagen were among a number of companies to announce last month that they had halted production and halted exports to the country.
An opening for China?
Domestic car models like the AvtoVAZ-owned Lada – an icon of Soviet-era independence – could theoretically benefit from the lack of foreign competition. But the sanctions have disrupted supply chains, leading to a serious shortage of spare parts.
The company has brought the company-wide summer vacation forward to April and announced it will switch to a four-day week for three months from June to try to save the jobs of more than 40,000 employees. The company says it is also designing new versions of several Lada models to reduce its reliance on imported parts.
Chinese automakers could benefit from 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 possibility that more will look for a Russian manufacturing base in the future,” she said.
Chinese companies Great Wall Motors and Geely both posted strong first-quarter sales growth in Russia and suffered smaller losses than western peers in March.
— Clare Sebastian and Chris Liakos contributed to this report.
