Home Business BMW Suspends Manufacturing Cars and Exporting to Russia

BMW Suspends Manufacturing Cars and Exporting to Russia

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On Tuesday, the world-known carmaker Bayerische Motoren Werke AG announced that it had suspended exporting cars to Russian Federation and would stop assembling autos in Kaliningrad, according to The Wall Street Journal:

“The aggression against Ukraine cannot be tolerated, and we are following the events with huge concern and anxiety. The up-to-date political situation forces us to stop our production in Kaliningrad as well as export to the Russian market until further notice,” told the BMW spokesman.

Manufacturing Cars and Exporting to Russia

The company also announced that due to the closure of some suppliers in Ukraine, supply chain disruptions may occur, which would also affect the work of some factories. Several years ago, BMW abandoned the construction of its own factory in Kaliningrad and partnered with the Russian carmaker Avtotor, which assembles BMW vehicles from ready-made kits, which is a regular practice in the automotive industry. BMW’s decision was taken after Western countries imposed a series of financial and economic sanctions against Russia. Now, it is advisable to make a BMW VIN check to make sure that the car is legally sold even in the secondary market.

Key Car Manufacturers Supporting the Sanctions

It was also reported that Volkswagen, Volvo, and Hyundai stopped delivering their cars to Russia. The sanctions disrupted logistics and supply chains, tightening Russiaʼs economic isolation. In particular, Toyota Motor Corp said that the export of its cars to Russia was suspended indefinitely after similar actions of local competitors Honda Motor and Mazda Motor.

Global car companies, including the Mercedes-Benz Group and Ford, have also stopped manufacturing and selling vehicles in Russia, while the world-largest shipping companies, like Maersk and MSC, have suspended container traffic to and from the country. On Wednesday, the spokesperson of Maersk (the company supplying food and medicine to Russia) said that the goods are at the risk of being spoiled due to delays in ports and customs.

Manufacturing Cars and Exporting to Russia

Western sanctions, including the closure of some Russian banks from the global financial network SWIFT, have forced dozens of global companies to suspend exports and operations in the country, devaluing the rubble and forcing the Central Bank to raise interest rates. As reported, analysts say that due to Western sanctions against Russia for invading Ukraine, Russia is facing default on public debt.

No more new cars in Russia

Meanwhile, in Russia, car prices are rapidly increasing. World manufacturers have stopped production and supply of cars and spare parts to the Russian market. Due to the shortage of components, production was stopped by Avtovaz, which produces Lada cars.

The record devaluation of the rubble, the fall of the stock market, and the shortage of USD and EUR drove the Russians to invest their money in cars to save at least something. As a result, demand for cars has risen sharply, as dealers have raised prices by 20-30%. Due to the growing demand, there is a shortage of new cars. As a result, demand for used vehicles has increased by a third.