follows the ‘Cold War’ of Western brands

The war in Ukraine, in addition to difficulties in the world supply of components, has meant the divorce between the western and russian auto industry. The latest brand to get rid of its positions in the country has been Volkswagen, which has made the decision to abandon its plant in Nizhny Novgorod.

This plant belongs to constructor local GAZ, who for almost ten years had a partnership with the German firm to produce vehicles. According to informa Reutersthe 200 workers under his charge have been offered 6-month paid voluntary leave of salary.

Together with this decision, Volkswagen has communicated to its Russian industrial partners that local vehicle production will remain suspended throughout the yearwhich means that the hiatus caused by the conflict and the western sanctions it will not recover before 2023.

The new ‘Cold War’ of the automotive industry

Vw Kaluga Plant

Volkswagen’s decision is the latest step in a chain of events that begins in March, when in response to the invasion of Ukraine ordered the shutdown of their factories russians

And while there are currently no signs that the brand will leave the country, return to normality seems somewhat unlikely. Not in vain, the European Union maintains a sanction on the industrialist Oleg Deripaska, one of the owners of GAZ.

It should be noted that, according to past releases of the Russian subsidiary of the Volkswagen Group, in 2021 the plant had received an investment of 63 million euros for the production of the Taos SUV, a strategic model for the local market.

Vw Kaluga Plant

Likewise, Volkswagen it also has frozen the production of its other factory located in the Kaluga region. This last plant is its property and has a workforce of approximately 4,200 employees, who are hand over hand since spring.

Thus, the Ukrainian conflict is taking place ahead industrial and commercial ties that emerged between Russian and Western manufacturers after the fall of the sovietic Union and the opening of the (then) new Russian Federation to international markets.

At that time, both parties won: Western manufacturers entered a new market with a large target audience, while former state-owned Soviet brands managed to avoid demise by transforming into private companies with the opportunity to significantly evolve their products.


Now, within the current war scenario the production stoppage strategy is the most common: in the same region of Kaluga and for similar reasonsMitsubishi halted assembly of its Outlander and Pajero Sport in April due to difficulties securing component supplies.

But beyond stopping the machines there is an even more radical solution, that of pack up and leave the country. This has been the path followed by Renault, who two months ago sold for a symbolic price its assets in Russia and its stake in AvtoVAZ to the Russian government itself.

Volkswagen, Mitsubishi and Renault have been among the first brands to take strong positions against the Vladimir Putin regime. We will have to follow the course of events to see if others follow in their footsteps, but the most serious thing about this phenomenon is that the return to the friendly posture now seems more distant than ever.

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I started to play with tech since middle school. Smart phones, laptops and gadgets are all about my life. Besides, I am also a big fan of Star War. May the force be with you!

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