Text | Qin Fanghui
Design | microcosm
Since Russia announced its military operations in Ukraine, Western countries led by the United States have begun to impose a new round of sanctions on Russia to "contain" and try to "isolate" Russia in an "all-round way".
Under the continuous pressure of investors and consumers, European and American car companies have also begun to take sides and suspend the delivery of cars to the Russian market, in an attempt to "hit hard" in a lose-lose manner.
On the other hand, the dispute between the two places is also triggering a crisis in the service of major multinational car companies and supply chains.
According to the data, the sales volume of the Russian automobile market has not been stable in recent years. Previously, affected by political factors such as Ukraine, Western countries led by the United States imposed continuous economic sanctions on Russia, which caused a sharp decline in Russian car sales.
In 2014, Passenger Car sales in Russia were 2.276 million units, and in 2015, it showed a cliff-like decline, with sales of only 1.284 million units, recovering in 2017 and 2018 (1.607 million units), followed by a slight decline in 2019, and a further decline to 1.434 million units in 2020 due to the impact of the epidemic.
Although there are no exact statistics on new car sales after the start of the war, under the pressure and dilemma of many parties, Russia's automotive industry will inevitably suffer an unprecedented blow.
On February 28, Daimler Trucks said it would immediately suspend its operations in Russia, including cooperation with Russian truck manufacturer Kamaz, "From now on, Daimler will no longer cooperate with Camas to produce trucks and will not supply them with parts." ”
At the same time, GM announced that it had suspended some operations in Russia and stopped all exports to Ukraine. Statistics show that GM sells about 3,000 cars in Russia every year. Ford also said it had notified the local joint venture partner to immediately suspend operations in Russia until further notice.
On March 1, Jaguar Land Rover said, "The current global environment also presents us with trade challenges, so we will suspend the delivery of vehicles to the Russian market and closely monitor the situation on behalf of our global customers." ”
Aston Martin said the company would suspend the sale and delivery of cars to Russia due to U.K.'s sanctions on Russia. Russia and Ukraine account for less than 1% of their global sales.
It is worth mentioning that the Ukrainian auto market is basically dependent on imports, and the best sales volume in January 2022 is Renault (904 vehicles), the second place is Toyota (596 vehicles), and the third place is Chery Automobile (364 vehicles), and the market volume is far less than that of Russia.
For such a ridiculous behavior of "hurting the enemy eight hundred and losing ten thousand self-inflicted", I wonder if these car company executives are really willing?
Compared with the insignificant "sales market" and "production base" role of Russia and Ukraine in the automotive industry, the most sensitive is its important status as a "parts supplier".
According to foreign media reports, protracted political conflicts have affected the cost of automobile logistics in Eastern Europe. In the past, a large part of the complete vehicles and auto parts were supplied to Russia from Western Europe via Ukraine.
Now that supply chain adjustments have led to a multiplication of parts transportation distances, delivery times and logistics costs, the turmoil in the global logistics market means that the original supply plan has been interrupted, and these problems are now like an avalanche.
At present, the supply chain problems caused by the conflict have been highlighted, and many automakers around the world have announced temporary suspensions.
On March 1, BMW said in a statement, "In view of the current situation in Russia and Ukraine, we will stop production in Russia and stop exporting to the Russian market." ”
Last year, BMW assembled about 12,000 vehicles at its plant in the Russian enclave of Kaliningrad, which has been operating in partnership with local car company Avtotor for more than 20 years.
BMW previously purchased wire harnesses from western Ukraine, and production at BMW's plants in Germany and other European countries is expected to be disrupted due to supply bottlenecks.
For similar reasons, the Volkswagen Group also announced the suspension of production at its Zwickau and Dresden plants in eastern Germany, and it is uncertain when the shutdown will last. It is speculated that the closure of the Zwickau plant alone will result in a reduction in production of 1,200 vehicles per day, with the ID. series of electric vehicles particularly affected.
Indeed, the complexity of the situation in Ukraine has always deterred overseas investors. In 2019, the Volkswagen Group decided not to plan a new plant in Ukraine, while the local plant in Solomonovo was also planned to be relocated to Serbia.
Toyota motor said it will suspend production at its Russian plant from March 4, while toyota will also stop exporting cars to Russia indefinitely due to supply chain disruptions. Toyota also mentioned other difficulties in procuring parts and logistics.
Renault's subsidiary in Russia also recently said that due to the logistics bottlenecks and parts shortages in Russia and Ukraine, the company decided to suspend the operation of its Moscow auto assembly plant from February 28 to March 5. Notably, 8% of Renault's core profit comes from the Russian market.
Under the clouds of war, the most tragic of them is the South Korean Hyundai Motor Group. South Korea's exports of automobiles and auto parts to Russia account for about 40% of total exports to Russia.
In terms of vehicle sales, Hyundai and Kia sold more than 370,000 vehicles in Russia last year, and the sales volume of the two brands ranked in the top three locally.
The Korea Automobile Industry Association predicts that if the Situation of the Russo-Ukrainian War continues to expand, the sales of Korean cars in the Russian market will be reduced by nearly 30% at most.
Of course, the Chinese people are more concerned about Chinese car companies.
China has long stated that China has always rejected any unilateral sanctions and that it is China's right to develop normal economic and trade relations with other countries. Unilateral sanctions are worthless beyond intensifying contradictions and making the situation more irreparable.
China hopes for world peace, but every time the Western countries led by the United States clash fiercely with the Soviet Union (Russia) and the Middle East countries, it may also become a valuable opportunity for China to cultivate obscurity and seek development.
In the Russian market, Haval became the best-selling Chinese car brand for three consecutive years, with sales of 39,000 units, an increase of 125% year-on-year, ranking twelfth in the Sales List of Russian passenger car brands. (Even so, that's the equivalent of a month's sales of the Haval H6 in China.) ）
Regarding the impact of the situation in Russia and Ukraine, Great Wall Motors said that the current production and sales of Russian factories have no impact. Ukraine's export business may be affected in the short term, but there is no problem in the long run.
In addition, for the chip supply problem, the Great Wall pointed out that there are chip suppliers who export directly to Russian factories.
Russia is also Chery's largest overseas market, with sales soaring 224 percent last year to 37,118 units. In 2021, Geely Automobile's sales in Russia are equally eye-catching, reaching 25,000 units, an increase of 59% year-on-year.
With the large-scale withdrawal of Western car companies in Russia, with its own advantages in the whole industry chain, R & D and manufacturing potential and continuous improvement of quality, Chinese brand cars are expected to win more shares.
However, if the war is carried out for a long time, and then directly affects the economy and people's livelihood of Russia and Ukraine, it is another story.
Although the impact of the Russian-Ukrainian conflict on the automotive industry is still immeasurable, the market environment is changing rapidly, and we should be prepared for both hands.