Western carmakers ran for exit following Russian President Vladimir Putin’s decision to invade Ukraine in February. Toyota and Volkswagen were among a raft of companies to announce last month that they had stopped production and halted exports to the country.
An opening for China?
Domestic car models like the AvtoVAZ-owned Lada – an icon of Soviet-era self-reliance – could, in theory, stand to benefit from the absence of foreign competition. But sanctions have snarled supply chains, leading to a severe parts shortage.
The company has brought forward a company-wide summer vacation to April, and announced it will move to a 4-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 be less reliant on imported parts.
Chinese carmakers could capitalize on the departure of Western brands, said Carol Thomas, central and eastern European analyst at consultancy LMC Automotive.
“Chinese brands will no doubt see the current situation as an opportunity and there is a chance more will look to establish a Russian production base in the future,” she said.
China’s Great Wall Motors and Geely saw strong growth in sales in Russia over the first quarter as a whole, and suffered narrower losses than Western rivals in March.
– Clare Sebastian and Chris Liakos contributed to this report.