Ford Might Suspend Russian Plant Production For Two Months Due to Crimea Situation image

Ford Motor announced it might suspend production at one plant in Russia for almost two months due to the problematic economic and geopolitical conditions caused by the ongoing issues with Ukraine.

Ford Sollers, the US automaker’s Russian joint venture, announced it might suspend production at the assembly plant located near St.Petersburg, which builds the Mondeo midsize and the Focus compact models. Sales of cars have dropped in Russia as one in three new vehicles sold is a SUV, but Ford plans to triple capacity in this market to around 350,000 units in the following years.

“The ongoing weakening of the ruble puts additional pressure on the Ford Sollers business,” Ford Sollers said in a statement. “As always, we are constantly monitoring the overall economic situation and will act according to the changing environment.”

The crisis in Ukraine has affected vehicle sales  in global markets, especially Russia, and worsened the economy. In 2013 vehicle sales in Russia reached 2.78 million units, a decrease from 2.93 million sold in 2012. There are slight chances for Russia to manage to surpass Germany and become the top auto market in Europe by the end of this year, according to the Association of European Businesses in Russia.

read more: Russia: New car sales may fall 6.5 pct in 2014 – minister

Some analysts predict that vehicle sales in Russia might reach 3.5 million units, while other, more optimistic, even think the number might reach 4 million units. Still, it has to be taken into consideration the fact that new vehicle sales in Russia reached a nine month slide in 2013, which hit the bottom in December when the government credit incentive program ended.