Last week Russian forces invaded Ukraine, making it the biggest attack by one state against another in Europe since World War Two. Many firms have halted their operation in Russia as there are Western sanctions against Russia. Global auto and truck makers suspend businesses in the country as the invasion happens. It includes Sweden’s Volvo Cars and Germany’s Daimler Truck.
Until a few days ago, it was said that the automakers could possibly halt their operations in Russia. However, as many leaders opted to go against the war, things are changing. Russia’s biggest foreign investor, Energy Giant BP Plc announced over the weekend abruptly that its 20% stake in state-controlled Rosneft will be abandoned. It is said to be of cost up to $25 billion.
Swedish automaker Volvo Cars said that the car shipments will be suspended to the Russian market until further notice. This move made the automaker the first international automaker to do so as sanctions over the invasion continue to bite. In a statement, the company said it had made the decision because of “potential risks associated with trading material with Russia, including the sanctions imposed by the EU and US.” Also said, “Volvo Cars will not deliver any cars to the Russian market until further notice,”
Other automakers
Earlier on Monday, the RIA news agency reported Volkswagen had temporarily suspended deliveries of cars already in Russia to local dealerships, citing a company statement. VW previously said it would halt production for a few days this week at two German factories after a delay in getting parts made in Ukraine.
Furthermore, Daimler Truck said on Monday it would freeze its business activities in Russia with immediate effect, including its cooperation with Russian truck maker Kamaz , which is 47% owned by Russian state conglomerate Rostec. Mercedes-Benz Group is also looking into legal options to divest its 15% stake in Kamaz as quickly as possible, the Handelsblatt newspaper reported.
Shipping from Ukrainian ports, an important corridor for grain, metal, and Russian oil shipments to the rest of the world has all but ceased. Economists and business leaders fear this will hit supply chains that rely on components and little-known commodities from Russia such as neon gas and palladium, important ingredients to make semiconductors. Industries such as car manufacturers have already been disrupted by a surge in demand after the easing of pandemic lockdowns and persistent production bottlenecks. Russia’s invasion is said to not only have impact on the country, but the rest of the world as well.
