Russia struggles to repair its broken supply chain
By Automotive Logistics2022-05-24T11:36:00
Western sanctions against Russia have all but ended Russian automotive production and the country is struggling to source parts from other markets and set up new supply routes to feed the remaining plants in operation
Solving the logistics crunch is essential to prevent the Russian automotive industry from complete disintegration. Almost all the leading foreign carmakers in Russia have stopped production there, including BMW, Ford, Hyundai, Mercedes-Benz, Renault, Volkswagen and Volvo. Only Russian vehicle makers Avtovaz, Gaz and Kamaz are still running operation, though they are dealing with components shortages.
The conflict has resulted in a dramatic shortage of parts imports from Europe. For example, in March of 2021 Russia imported parts worth €305.5m ($327m) from Germany, according to the Russian Business Consulting agency. In March this year that figure had dropped to just €19.4m worth of parts.
Against this background, Russian vehicle production in April dropped by 78.5% year-on-year to just 32,700 vehicles, according to the Russian Association of European Businesses.