June 26, 2022

Automotive Industry Out of Gear


Automotive Industry Out of Gear
Are there red and blue lights behind me?  Pexels, Pixabay. 

The Russian automotive industry is experiencing a major decrease in demand amid the invasion of Ukraine, prompting China to slow its car exports to Russia.

Russia was sanctioned by Western car and part manufacturers when the invasion began and has since been purchasing cars from China. Russia imported R10.3 billion ($190.7 million) worth of Chinese cars in March, R4.6 billion ($84.6 million) in April, and just R1.7 billion ($32 million) in May.  

The value of car parts imported from China has seen a similar downward slope.  In May, Russian companies purchased only R4.4 billion ($81.3 million) in automotive parts, a big drop from the R6.3 billion ($117.1 million) spent in February.

It is likely that the automotive slowdown is a result of economic shocks from the sanctions.

President Vladimir Putin has ordered that a plan of action for the flagging Russian auto industry be drafted by September 1, 2022.

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