France’s Renault has decided to halt vehicle production output at its Russian Moscow plant for three weeks, as the country’s auto industry continues its massive downturn.
Russian car sales have dropped 10 percent last year after falling another 5 percent in 2013 even as the Moscow government introduced a subsidy program designed to support new car sales by scrapping older cars. The auto market in Russia, once heralded as the one to overtake Germany as Europe’s largest, has been crippled by the economic slowdown that has worn consumer confidence. The western nations have all imposed economic sanctions on the country’s implication in the political crisis in Ukraine, while the ruble has been skydiving after oil prices collapsed.
Renault’s Avtoframos factory will cease operations between February 16 and March 6, according to company spokesperson, after overall January sales in Russia collapsed by 24 percent – according to data from the Moscow-based Association of European Businesses – as the country’s economic crisis took another turn for the worse. Renault, the country’s fifth best-selling brand, had even worse sales – with deliveries plummeting 32 percent last month. The French automaker constructs the Megane, Fluence and Latititude models from the namesake brand, along with badged versions of the Dacia Sandero, Logan and Duster SUV in the Moscow factory.
Global carmakers from Ford to Volkswagen took heavy losses in Russia after investing massively in the local auto industry last year, and now accounting firm PricewaterhouseCoopers forecasted the Russian auto market might collapse a further 25 percent to 35 percent in 2015.
Via Automotive News Europe