Japan’s largest company, Toyota Motor Corp announced recently it decided to cease production of vehicles through its joint venture at the assembly facility in Vladivostok, eastern Russia, due to the slumping Russian economy.
The weakening Russian economy has massively impacted the once booming automotive industry, which had the auto market post 10 percent or more sales increases on an annual basis before the recession took hold in 2014. Toyota’s joint venture with Japanese trading firm Mitsui & Co and Russian automaker Sollers was tasked to assemble Toyota’s Land Cruiser Prado sport-utility vehicle but now the output has ceased as of late June, according to a Toyota spokesperson. The company now imports around 1,030 Prados per month into Russia – around the same tally that was assembled at the Vladivostok factory – from the Tahara, Japan, plant. The Japanese automaker can thus compensate a little the falling Russian currency with its own weakening yen that allows Japanese companies to reap the benefits of repatriated earnings.
Global carmakers have been massively impacted by the plunging sales in the once very promising Russian market. Deliveries have dropped around 50 percent since the previous peak back in 2012-2013 when the country was poised to surpass Germany as Europe’s largest auto market. General Motors back in March also ceased production at its St. Petersburg manufacturing facility and decided to almost completely pull away from the market. Toyota said its forecast for the market remained bullish, however, with ongoing plans to lift production output at its now sole Russian plant in St. Petersburg by the end of the year to 100,000 autos.