Russia and Ukraine war also affected car makers
Russia’s and Ukraine’s ongoing conflict has weakened European and global markets. As a result, vehicle manufacturers are expected to suffer significant losses as a result of this. According to experts, this will have an impact on the auto industry’s supply chain, production, and workforce.
Following Russia’s attack on Ukraine, several companies, including Volkswagen, Renault, and Nokian Tires, are planning to halt production and relocate their plants. Hyundai and Kia are both large-scale manufacturers in this country. The headaches of these Korean companies have increased as a result of the war.
Russia is the world’s largest producer of palladium metal.
Palladium is a metal that is abundant in Russia. Russia is the world’s largest palladium metal supplier. Palladium is used to reduce the effects of toxic gases emitted by vehicles, such as carbon monoxide and nitrogen dioxide. In addition, the exhaust from gasoline and hybrid vehicles can be found in cell phones, electric equipment, dental treatment, and jewellery.
Volkswagen and Skoda, for example, have postponed shipments.
Many global automakers and local dealers have delayed shipments from Russian companies since the start of the war. Chevrolet has received a notice from Audi, and Volkswagen and Skoda are preparing for it. Porsche and Tata Group Land Rover have both begun deferring shipments. Audi has also informed its partner that the shipment will be put on hold for the time being, according to the report. Simultaneously, any inventory that has already arrived in Russia will be delivered.
Hyundai and Kia will be impacted by the semiconductor shortage.
Hyundai and Kia, two Korean automakers, are reliant on Ukraine. They import gases from Ukraine such as neon, krypton, and xenon. As a result, these businesses will face a shortage of electric vehicle batteries for semiconductors. As a result, their price may also rise.
In 2010, Hyundai opened its first factory in Russia.
In 2010, the Hyundai Group opened a factory in Saint Petersburg, Russia, and recently acquired an older General Motors facility to manufacture the Hyundai Tucson, Palisade, and Kia Sportage for export to North America. In Russia, automobile manufacturers currently produce more than 2.30 lakh cars per year.
Hyundai, Kia, and Hankook Tires are closing their offices in Russia.
Die has a local sales office in Kyiv, Ukraine, and its jazz factory in Zaporozhye, Ukraine, produces the Kia Rio sedan and hatchback. Hankook Tires, another Korean company, has also closed its sales office in the country. This could have a significant impact on global electric vehicle battery cell production in Ukraine.
The Korean Automobile Manufacturers Association anticipates a drop in sales of up to 29% this year. Similarly, after Russia’s invasion of Crimea in 2014, auto imports fell by 62 percent.
New sanctions against Russia have been imposed by the US Treasury Department.
The US Treasury Department will target the core infrastructure of Russia’s financial and economic institutions as a result of Russia’s war on Ukraine. Sberbank, VTB Bank, Otkriti, Sovcombank, and Novicombank are among the banks targeted. The move is intended to freeze any US assets held by companies and their officers who have refused to trade with the US entity.
Lightweight vehicle production will be cut to 85.8 million units in 2022, according to JD Power and LMC Automotive Analyst, a reduction of 4 lakh vehicles from this year. Lightweight vehicle sales, on the other hand, are expected to increase by 5% globally.
Renault and its partner brands Stelantis and Toyota are among the other vehicle manufacturers. Renault has already announced that from February 28 to March 5, it will not be producing in Moscow (Russia).