Localisation hopes fade for Russia as it struggles to attract China Russia’s efforts to boost domestic vehicle production by courting Chinese automakers are running into obstacles, from economic volatility to strategic caution among OEMs. As Russian policymakers push new incentives, analysts warn that structural challenges could undermine the country’s localisation ambitions. Vladislav Vorotnikov
Ukraine agrees to preliminary agreement to provide US with 50% of critical mineral revenue Despite an unfavourable clash at the White House last Friday, Ukraine remains open to a framework agreement with the US to provide 50% of revenue from critical mineral deposits and relevant infrastructure in exchange for continued support and security guarantees in its war with Russia. Marcus Williams
Latest ECG business intelligence report shows increase in global vehicle exports but slight decline in EVs to EU The Association of European Vehicle Logistics (ECG) reports there has been 25% increase in global vehicle exports from China but EU has imported fewer EVs in first nine months of 2024 Marcus Williams
China trade crisis leaves Russia’s spare parts market in turmoil Car drivers in Russia are waiting longer for their cars to be repaired, with delays stretching up to six months because of a crippling shortage of spare parts. Vladislav Vorotnikov
Russia faces a shortage of Chinese automotive imports as sanctions intensify Until recently, Chinese automotive exports to Russia continued to grow. During the first half of 2024, light passenger vehicle exports from China jumped by 35.4% and were valued at $6.2 billion, according to China’s General Administration of Customs. Imports of trucks dropped by 24% to $1.3 billion, though this was not enough to undermine the overall positive trend in vehicle trade. Vladislav Vorotnikov
Chinese finished vehicle exports to Russia in jeopardy Rosteс, the parent company of Russia’s leading automaker Avtovaz, wants government authorities to limit the flow of Chinese finished vehicles into the country. The request follows a number of tariff measures taken by western nations, including Europe and the US, to tackle subsidised imports specific to electric vehicles. Vladislav Vorotnikov
Red Sea crisis resurrects China-Europe rail freight transit through Russia The ongoing Houthi attacks in the Red Sea have given the transit of automotive freight from China to Europe a second breath, according to state-run railway monopoly, Russian Railways (RZD) Vladislav Vorotnikov
Russia cracks down on parallel imports through EEU Dozens of logistics companies across Central Asia and the Caucasus engaged in parallel imports of finished vehicles into Russia are expected to go bankrupt in the next few months following intervention by authorities to bring the industry in order. The new rules could also hamper the import of Chinese-made vehicles to Russia. Automotive Logistics
Mercedes-Benz Group cuts ties with Kamaz in Russia Mercedes-Benz Group has sold its remaining 15% stake in Russian commercial vehicle maker Kamaz. A spokesperson for the carmaker said that the necessary regulatory approvals had been granted and contractual agreements implemented. Marcus Williams
Avtovaz looks for ro-ro capacity to strengthen vehicle exports Russian carmaker Avtovaz is looking to boost production through exports abroad in 2024, including target markets in Iran and Egypt, according to the carmaker’s president, Maxim Sokolov. It follows a two-year decline in foreign sales. Russian cargo carrier, Fesco said it would support the carmaker’s export plans with a specialised fleet of car-carrying vessels, which is subject to Avtovaz receiving a concrete export order. Automotive Logistics
Capacity and driver shortages push up logistics costs in Russia Soaring logistics costs have pushed Russia’s leading carmakers, Avtovaz and UAZ, to jack up the sales price of their vehicles. Automotive Logistics
Containerised vehicle deliveries by rail from China to Russia are on the rise During the first nine months of 2023, Russia imported 414,000 finished vehicles, 250% up compared with the previous year, with 97% of deliveries coming from China, according to estimates from the Federal Customs Service. That compares to 2022, when China exported 117,000 finished vehicles to Russia. Automotive Logistics
Russian carmakers braced for turbulence as US sanctions promise to bite A recent round of US sanctions against the Russian automotive industry threatens to hurt the supply chain contingencies established in the country since it invaded Ukraine. Automotive Logistics
Chinese vehicle exports keep Russian vehicle logistics afloat at sea – and by rail Russia has become the top destination for Chinese vehicle exports, rising almost 500% year-on-year. But vehicle logistics modes, cost and capacity are a challenge, leading to new delivery methods, including cars in containers.
Former VW plant in Russia reported to be acquired, assemble kits from Chery A former Volkswagen plant in Kaluga, western Russia, is reported to be negotiating plans to assemble kits from China’s Chery Automotive Logistics
Meilin Auto unveils plans to begin sales to Russia Meilin Auto has become the first automotive dealer outside the Commonwealth of Independent States (CIS) to register a subsidiary on the Russian market and begin vehicle sales to local customers. Automotive Logistics
Weathering the storm from the east The ongoing war in Ukraine is having detrimental repercussions for both inbound and finished vehicle logistics in central and eastern Europe. There is uncertainty in the supply of critical materials and disruption to transport routes in Europe are delaying deliveries of vehicles Automotive Logistics
Chinese automakers surge amid western withdrawal from Russian market Delegates at last week’s Spring Congress of the Association of European Vehicle Logistics (ECG) heard that China’s vehicle exports surged in the first quarter of 2023, as global demand for electric vehicles helped spur a strong start to the year. Malcolm Ramsay
Turkey suspends automotive re-export to Russia On March 8, the Turkish Customs Service suspended transit of western-sanctioned goods to Russia, including finished vehicles and automotive components. Automotive Logistics
A Russian market close to catastrophe With grey imports on the rise and natural disasters adding to the limiting effects of international sanctions, any optimism about re-establishing Russian supply chains may be eclipsed by further harsh realities Automotive Logistics
Avtovaz looks for more capacity despite supply disruption Russia’s largest carmaker, Avtovaz, has said it will take over the former Nissan plant in St Petersburg and put it back into operation in 2023. Nissan pulled out of St Petersburg shortly after Russia’s invasion of Ukraine last year. Automotive Logistics
Vehicle imports to Russia increase despite legal grey zone Despite a looming threat of criminal liability for parties involved, complicated logistics movements have seen European finished vehicle imports to Russia increase, after falling off sharply following sanctions. Russian logistics companies are using third parties to move vehicles from Europe, through Iran and across the Caspian Sea into Russia. Automotive Logistics
Russian carmakers begin CKD assembly from Chinese imports Russian carmakers are making efforts to resume production at plants in Kaliningrad and Moscow from complete knockdown kits (CKDs) imported from China. Automotive Logistics
Ukraine war to shake up car making in the post-Soviet space Uzbekistan and Kazakhstan could take advantage of the mass exodus of western vehicle makers and components suppliers from Russia, attracting new investments and ramping up production, according to research from Moscow-based thinktank PromRating. Automotive Logistics
Russia pins hopes on electric future as carmakers continue exodus Russia is hoping to salvage its automotive sector by pumping billions in investment into electric vehicle (EV) production, rather than trying to rescue production of combustion-engine vehicles at the car plants left redundant by western carmakers who are leaving the country en masse. Automotive Logistics
Russian ban on European haulage will inflate logistics costs The Russian government has greenlit an executive order banning European Union haulage trucks from crossing borders into Russia’s territory. Though actively lobbied by several Russian business groups during the past few months, this step promises to further increase logistics costs and hamper the remaining automotive trade. Automotive Logistics
Russia invests in plan for independent automotive market Vladimir Putin has instructed the Russian government to develop a long-term programme for its automotive industry that will make it largely independent of technology provided by the West. The Russian Industry and Trade ministry is now looking for trillions of roubles from the federal budget to set that up. Automotive Logistics
Maersk pulls out of Russian terminal business and looks to Malaysia APM Terminals (APMT), which is owned by AP Moller-Maersk, is pulling its business out of Russia, with the divestment of its 30.75% share in Global Ports Investments (GPI), Russia’s biggest container terminal operator. Marcus Williams
Charting a course to bypass Russia Carmakers have been looking for alternative routes to deliver finished vehicles and automotive parts between Europe and China since the latter invaded Ukraine. Prior to that, Russia was the preferred route for shipping cargo between the two regions because of the lower costs and lower number of customs checkpoints. Automotive Logistics
Threadbare trade on the Silk Road The war in Ukraine and subsequent sanctions on Russia have hit container shipments by rail between Europe and China, with repercussions for automotive supply and the further complications for ocean freight Malcolm Ramsay
Ukraine struggles to restart auto production and supply Vehicle assembly has resumed in Ukraine and sales show signs of recovery but the ongoing Russian hostilities in the country continue to threaten production and supply, with the production of key materials and components severely constrained. Automotive Logistics
VW pulling out of production at Nizhny Novgorod Volkswagen Group is permanently pulling out of contract production at the Nizhny Novgorod plant in Russia where it assembles VW and Skoda brand vehicles with Russian carmaker Gaz. It ends an agreement that was first signed in 2011 and was due to run, under its contract renewal, until at least 2025. Marcus Williams
Europe scrambles for palladium as Russia threatens supply European carmakers have increased palladium imports from Russia despite the current logistics challenges because of fears supplies could be further restricted. The move follows threats by Russian officials to restrict exports to the West and trade the metal exclusively in roubles. Automotive Logistics
Russia struggles to revive Soviet brands because of parts shortages In the wake of a mass exodus of Western carmakers from Russia following the invasion of Ukraine, the country plans to revive the production of two Soviet car brands, the Volga and Pobeda, according to Russian Industry and Trade Minister, Denis Manturov. Automotive Logistics
Russia struggles to repair its broken supply chain In a bid to save what is left of its automotive industry, Russia is taking measures to establish new supply chains and logistics networks following the breakdown caused by the international sanctions applied in the wake of the Ukraine war. Automotive Logistics
Automotive logistics in Russia is in tatters Already debilitated by the impact of Covid, the Russian automotive market was hoping for better times ahead, but the invasion of Ukraine and the consequent sanctions imposed on Russia have undermined production and sales, and hit the logistics providers hard Automotive Logistics
Ukraine’s vital link in the European supply chain The shutdown of much industry, trade and logistics out of Ukraine is hurting automotive production and driving up logistics and bunker costs for European logistics providers. Namrita Chow
Russia’s invasion of Ukraine is a long-term risk for the automotive supply chain The impacts stretch beyond inflation and corporate retreats to critical shortages upstream for semiconductor and EV supply. Daniel Harrison
Blog: Conflict in Ukraine disrupts auto supply in Europe and Russia Read rolling updates on the developing situation in Ukraine, wider Europe and Russia as it impacts the global automotive supply chain Marcus Williams
Ukraine invasion causes widespread supply chain disruption Russia’s military invasion of Ukraine has already had widespread repercussions across Europe’s automotive supply chain and supporting multimodal logistics network. Marcus Williams
Ukraine border tension threatens automotive supply chain An escalation of the conflict between Russia and Ukraine promises to partly disrupt supply schemes in Eastern Europe, wreak havoc on new vehicle production in the post-Soviet space and even cause a global shortage of some automotive components. Vladislav Vorotnikov reports Vladislav Vorotnikov
Bo Andersson takes up new role with Uzbek carmaker Avtosanoat Following his departure from tier-one supplier Yazaki in April this year, Bo Andersson (pictured) has taken up a new position with Uzbek state-owned vehicle maker Uzavtosanoat as CEO of its two main subsidiaries – Uzavto Motors and Uzavto Motors Powertrain. Marcus Williams
Nicolas Maure to take CEO role at Renault Russia Nicolas Maure (pictured) will take over as CEO of Groupe Renault operations in Russia and the Commonwealth of Independent States (CIS) from the beginning of May this year. The role is newly created as Renault moves from appointing chairmen of different regions to assigning CEOs of brands within them. Maure will report to Groupe Renault CEO, Luca de Meo. Marcus Williams
Electric vehicles supporting sales through pandemic, says head of Gefco Russia Electric vehicles (EVs) and hybrids will drive the growth in global sales until the Covid-19 pandemic is over, according to Valeria Seledkova, general director of Gefco in Russia. Vladislav Vorotnikov
Chinese carmaker Haval signs a major investment contract in Russia Great Wall Motor’s subsidiary, Haval, has become the first Chinese carmaker to sign a special investment contract with the Russian Industry and Trade Ministry. Under the agreement, Haval will invest 42.4 billion rubles ($650m) to expand the car plant it opened in Uzlovaya last year and build a components plant to localise the supply of core parts, including engines, transmissions, electronic control modules, and vehicle control systems. Vladislav Vorotnikov
Russia: still supporting exports As its domestic market stagnates, Russia continues to seek growth abroad and is subsidising the export of vehicles and parts – at a cost of more than $60m a year Vladislav Vorotnikov
Water woes: how European river transport projects have ground to a halt Inland waterways can provide a more sustainable option than road or rail. But recent attempts to develop this mode across Europe have shown that it’s far from plain sailing Vladislav Vorotnikov
Fresh floes: What does the Northern Sea Route mean for automotive logistics? Arctic waters warmed by climate change promise a fast new route for cargo transport. Automotive Logistics looks at its potential for flows of automotive parts and vehicles Vladislav Vorotnikov
Stretching to the limit: How Sollers and Lorus move finished vehicles across Russia Operating across the largest country in the world – Russia – would be a challenge for any logistics operation, even without economic difficulties. OEM Sollers decided to distribute its finished vehicles in partnership with 4PL Lorus SCM Vladislav Vorotnikov
Russia takes a slice of the new Silk Road As vehicle shipments increase on overland routes between Europe and China, Russian companies such as state-owned RZD are aiming to capitalise on the new business Vladislav Vorotnikov
Q&A with Olga Stepanova, sales director of RZD Logistics Russian companies are aiming to capitalise on increasing finished vehicle volumes on overland routes between Europe and China. A senior executive at state-owned Russian Railways discusses the development of a new Silk Road between the two regions Vladislav Vorotnikov
A special case: how Russia hopes to boost local production with investment contracts Russia is attempting to boost tier supplier capacity via contracts with OEMs and logistics subsidies for parts makers, but it is unclear how successful this will be Vladislav Vorotnikov
OEMs push Russia to pay promised subsidies A group of carmakers in Russia has asked the government to pay the outbound logistics subsidies it promised for finished vehicles and automotive components delivered to foreign markets in 2018. Vladislav Vorotnikov
Containerisation: Why finished vehicle logistics needs to think inside the box While ro-ro is the traditional method of shipping finished vehicles, containerisation is becoming increasingly viable as the automotive industry decentralises and introduces more EVs. Growth in China and South East Asia offers particularly good opportunities Marcus Williams
Production & logistics part 2: Questioning the future This article is one of a series of pieces celebrating Automotive Logistics’ 20th anniversary issue that together take an extended look at the way top executives feel automotive production and logistics have changed in the last two decades – and where they see them heading in the future. Christopher Ludwig
Changes are the only certainty at Ford of Europe Dirk Willmann, director of material planning and logistics for Ford Europe, outlines how the carmaker is improving visibility and adapting its vehicle logistics network across Europe to better manage customer demand and trade uncertainties. Christopher Ludwig
Ford of Europe: A system of strength and complexity Dirk Willmann’s 25-year career with Ford has made him witness to the changing arc of the company’s supply chain in Europe and further afield, including more complicated material flows, new locations and footprint changes, as well as advances in technology. Christopher Ludwig
