Renault to temporarily close some Russian operations due to component shortages

The logo of carmaker Renault is pictured at a dealership in Vertou, near Nantes, France, January 17, 2022. REUTERS/Stephane Mahe

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MOSCOW, Feb 25 (Reuters) – French carmaker Renault (RENA.PA) will suspend some operations at its car assembly plants in Russia next week due to logistical bottlenecks that have caused component shortages, its local units announced on Friday.

The move comes after Russia launched an invasion of Ukraine on Thursday, although Renault, which has three car assembly plants in Russia, did not say whether its supply chain had been affected by the dispute. .

Renault, which returned to profit in 2021 after two years of losses, is among Western companies with the most exposure to Russia, where it earns 8% of its core earnings, according to Citibank. Read more

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In a statement, the French automaker’s Russian unit said its production in Moscow would halt from February 28 to March 5 amid “some interruptions in the supply of components”.

“The disruptions are mainly caused by tighter border controls in transit countries and the forced need to change a number of established logistics routes,” the unit said, without naming any countries.

Separately, a car plant in Togliatti, central Russia, could shut down some assembly lines on Monday, Russia’s top automaker Avtovaz – which is controlled by Renault – said, citing continued global shortages of electronic components. He said the plant should be fully operational on Tuesday.

The United States announced sweeping export restrictions on Russia on Thursday, hammering its access to global exports of goods ranging from commercial electronics and computers to semiconductors and aircraft parts. Read more

US sanctions do not cover Renault or Avtovaz and target supplies of specific components. Avtovaz CEO Nicolas Maure said this week that his company would look for other sources of microchip supplies in case US sanctions limit shipments. Read more

Neither the Renault unit nor Avtovaz mentioned the invasion of Ukraine in their statements.

Even without the sanctions, new car sales in Russia are expected to slow to 3.3% this year from 4.3% in 2021, due to shortages of electronic components, logistical challenges and rising costs, according to the report. Association of European Business.

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Reporting by Gleb Stolyarov Writing by Katya Golubkova Editing by Susan Fenton and Mark Potter

Our standards: The Thomson Reuters Trust Principles.


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Richard V. Johnson