Toyota Motor closes its plant in Russia

Toyota Motor closes its plant in Russia

Moscow (Reuters) – Japan Toyota Motor Corporation (NYSE:) Corp. said Friday it has decided to end production of cars in Russia due to disruptions in supplies of key materials and parts.

Toyota halted production in St. Petersburg in March due to supply chain problems, and stopped importing into Russia.

“During this period we have fully retained our workforce and made sure that our facility is ready to resume production if conditions permit,” it said in a statement.

“However, after six months, we have not been able to resume normal activities and we see no indication that we can resume work in the future.”

Toyota said its Moscow operations need to be restructured, but will continue to support the retail network in providing service to existing Toyota and Lexus customers.

“We will provide (employees) … assistance for re-employment, rehabilitation and welfare, including financial support above and beyond legal requirements,” Toyota said.

The Russian newspaper, Kommersant, which first reported the plans, said the plant, which has a capacity of 100,000 units per year and produces Camry and RAV4 models, will be preserved and may be sold in the future.

The Russian Ministry of Industry and Trade said it was working alongside regional authorities on ways to develop the site.

Several factories in Russia have halted production and shifted workers due to a shortage of high-tech equipment due to sanctions and an exodus of Western manufacturers since Moscow sent armed forces to Ukraine on February 24.

Renault (EPA πŸ™‚ has sold its largest stake in Russia-based automaker Avtovaz to a Russian science institute, reportedly for one ruble.

READ ALSO :   Russia says US long-range missiles aimed at Kiev will cross the red line

Luxury carmakers such as Jaguar have stopped exporting to Russia and Ford and BMW have suspended some production.

Volvo in July began laying off some of its employees in Russia – which last year accounted for 3% of the group’s net sales – after suspending sales, service and production in February.

tire makers Michelin (EPA πŸ™‚ And Nokian are also planning to leave Russia. Michelin said supply chain problems related to the sanctions made it impossible to do business there.

(Reporting by Satoshi Sugiyama in Tokyo; Editing by Kevin Levy, Jason Neely, and Jonathan Otis)

Newsletter Updates

Enter your email address below to subscribe to our newsletter