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The factory was acquired! Another day for car companies to withdraw from Russia completely

2024-03-02 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)07/16 Report--

On July 14, Japanese carmaker Isuzu Russia Co., Ltd., the official manufacturer and distributor of Isuzu, announced that it had sold 100% of its Russian subsidiary.

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It is understood that Isuzu has withdrawn from the Russian market and transferred its shares in its Russian subsidiary to Russian automaker Sollers. Subsequently, Russian carmaker Sollers also announced that it had completed the acquisition of Isuzu's Russian assets of Japanese auto group Isuzu and would restart the production platform of 50bell Russia in Ulyanovsk.

According to the agreement, within the framework of the acquired legal person, Sollers Group will provide spare parts for 50L trucks and passenger cars to meet its warranty obligations to customers and provide services in Russia. In addition, Sollers plans to restart Isuzu Russia's production platform in Ulyanovsk to preserve jobs and ensure existing production capacity.

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It is understood that the Japanese carmaker Isuzu has officially entered the Russian market since 2006. In 2008, the company's factory in Ulyanovsk began operation. The company has about 200 employees and mainly produces pick-up trucks and trucks. In March 2022, Isuzu stopped operating the plant because of the conflict between Russia and Ukraine and tight supply chains, and in November of the same year, Isuzu said it was considering the possibility of withdrawing from Russia. Since then, due to difficulties in the supply of spare parts, Isuzu had to withdraw from the Russian market and sell the factory.

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Data show that the factory produced a total of 3700 cars in 2021, accounting for about 1 per cent of Isuzu truck production. Isuzu said the main reason for its departure from Russia was "lack of prospects for resuming business operations".

As for Sollers, it is a Russian carmaker that has worked with Ford, Mazda and Isuzu. The Sollers Group has production bases for Russian SUV and UAZ light commercial vehicles (Ulyanovsk Automobile Plant) and ZMZ gasoline engines (Zavolzhsky Automotive Plant).

In addition to Japanese carmaker Isuzu, in fact, as early as May last year, a number of car companies have chosen to "break arms" to withdraw from the Russian market. Among them, Renault, which accounts for nearly 10% of the Russian car market, first announced its withdrawal from the Russian market, followed by Toyota, Nissan, Ford and Mazda, and Hyundai and Mercedes-Benz also announced that they would sell their assets in Russia. Most of the reasons for these car companies to abandon the Russian market are hit by the Russian-Ukrainian conflict that broke out in February 2022, followed by western sanctions, supply disruptions and the intensification of the Russian-Ukrainian conflict, coupled with the limited supply of raw materials available at home. The Russian auto industry has also been hit hard by a large number of car companies announcing a moratorium on car exports and sales to Russia. Data show that Russian car sales totaled 687400 units in 2022, down 41.24% from the same period last year.

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Against this background, Chinese car companies are constantly expanding the Russian market, and their market share has increased from 9% in January 2022 to 37% in December 2022, while Korean brands have dropped from 28.3% to 11.2%. European brands have dropped from 28.3% to 7.3%; Japanese brands have dropped from 17.9% to 6.6% and American brands have dropped from 1.1% to 0.9%.

According to the industry view, as overseas brands lose competition in Russia, the territory of the Russian market for Chinese car companies will continue to expand, and Chinese car brands may be able to further expand their share of the Russian car market in the future. Taking the sales data for the first quarter of this year as an example, according to data released by the Russian Association of European Enterprises (AEB), the market share of Chinese car brands soared from 18% to 42% in the first quarter of this year, of which Chinese brands represented by Geely, Chery and Great Wall accounted for 16.5%.

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New car sales in Russia have also recovered as Russian and Chinese brands fill the market share left by overseas manufacturers. According to industry analyst Autostat, new car sales in Russia in June were 82407, up 151.8% from a year earlier, but judging from the current sales situation, it is still difficult for the Russian market to recover to the level before the situation between Russia and Ukraine in the short term.

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