Ibekimi Oriamaja Reports
Toyota will close and possibly sell its plant in St. Petersburg, Russia, due to a lack of key components and materials as a result of Russia’s invasion of Ukraine.
Following Russia’s invasion of Ukraine, the automaker halted production at the plant in March. It also put a halt to vehicle imports into Russia.
Toyota said on Friday that it has kept the factory ready to resume production if circumstances allow, but there is no indication that it will be able to do so in the near future.
The factory can produce 100,000 units per year. It manufactured Camry midsize sedans and RAV4 crossover SUVs for the Russian market, as well as exports to Belarus, Kazakhstan, and Armenia.
“If sold, the plant will not produce rebadged Camry and RAV4 models,” a Toyota Europe spokesman told Automotive News Europe.
Last year, the RAV4 midsize SUV was the 11th best-selling model in Russia.
The automaker stated that it will maintain a restructured organization in Russia to serve existing Toyota and Lexus customers.
Toyota stated that employees will be offered assistance for re-employment, re-skilling, and well-being, in addition to financial support above and beyond the legal requirements.
Toyota has 2,350 employees in Russia. Around 1,900 people work at the St. Petersburg plant, with another 450 in Moscow overseeing marketing, sales, and finance operations.
“We estimate that about 2,000 people will leave Toyota in Russia,” said a Toyota spokesman. The Moscow team will primarily continue to assist customers in Russia with part import and distribution.
According to the Moscow-based AEB Automobile Manufacturers Committee, Toyota sold 221 vehicles in Russia in August, a decrease of 97% from the same month last year. The total market dropped 62% to 41,698 units.
According to Toyota, the Saint Petersburg plant produced 42,235 RAV4s and 38,547 Camry sedans last year.
According to AEB data, the RAV4 was the 11th best-selling model in Russia last year, with 38,441 units sold, ahead of the Camry, which sold 31,983 units.
After a 38 billion ruble investment (approximately $680 million at current exchange rates), the factory began production in December 2007.
Moscow’s invasion of Ukraine on February 24 triggered a mass corporate exodus from Russia, leaving behind billions of dollars in assets.
Volkswagen and Nissan are among the automakers that have halted production, furloughed workers, and ceased imports, leaving a market gap for Chinese automakers.
According to the Yale School of Management, over 750 companies have announced that they are curtailing operations there to some extent.
Renault sold its majority stake in AvtoVAZ, Russia’s largest automaker and owner of the Lada brand, to a Russian science institute in May, reportedly for one ruble with a six-year buyback option.
