While it may appear at first to be a way for the West to flex its muscles in an attempt to (economically) intimidate Russia into submission, VW’s announcement of production cuts in the Federation is officially motivated by the continued fall in sales.
The plan is to shut down the Kaluga factory for 10 days this month (as of September 8), in order to adjust for the 18 percent drop in local sales registered this year.
VW is looking to reduce the number of Polo, Tiguan and Skoda Octavia, Fabia models manufactured at the site from 150,000 units to 120,000 this year.
A company official was quoted by Reuters as saying: “Nevertheless Volkswagen Group is fully committed to the Russian market and is consecutively fulfilling its investment programme in Russia.”
It’s not only the automakers that are noticing a drop in their Russian side of the business, as it’s also parts suppliers that are feeling the contraction…
Local name Avtovaz also announced Lada production cuts, also citing falling demand in Russia. The company has been majority-owned by Renault-Nissan since 2012. Opel, for which Russia is its biggest market, also expressed worries about the market.
The company’s board member responsible with sales said: “There is no doubt that the situation in Russia is a concern. The market has shrunk substantially over the past few months and the Ukraine crisis has added to the uncertainty.”