The Volkswagen Group will close one of its two factories in Russia, a union has said, with the German company blaming a production shortfall due to import sanctions.
Citing a staff announcement on Tuesday, the Workers’ Association union said the Nizhny Novgorod plant would close due to a “lack of EU-produced parts, critically important components from from Ukraine and a lack of domestically manufactured equivalents,” reports Automotive News Europe. .
The European Union imposed sanctions on Russia after it invaded Ukraine earlier this year.
About 200 employees will be affected by the shutdown, but most of them have already taken voluntary payments, which included medical insurance and a claimed six-month salary.
The statement added that “disruption of supply chains and inability to predict conditions for returning to work” are other issues noted by Volkswagen, which suspended work at its two Russian factories in March amid sanctions. The other factory is in Kaluga.
Speaking to Automotive News Europe, Volkswagen confirmed it had closed its Nizhny Novgorod office on July 5, due to a “high level of uncertainty and the inability to forecast the potential resumption of production”. , with 60 office workers affected. He declined to comment further on the decision.
Although VW does not own the factory, it has a contractual agreement with the utility vehicle manufacturer Gaz Group, for several of its models to be assembled there, including the VW Taos and three Skoda models: the Kodiaq, the Karoq and the Octavia.
No news has yet been released on the future of the Kaluga plant, which employs around 4,200 people. Before the work stoppage, the Volkswagen Polo, Volkswagen Tiguan and Skoda Rapid were built by Gaz under license, as well as the Audi Q7 and Audi Q8. Gasoline engines for a range of models are also manufactured there.
At the time of the shutdowns, Volkswagen said it “takes its responsibility to affected employees in Russia very seriously.”
Besides Volkswagen, Aston Martin, BMW, Ford, General Motors, Honda and Jaguar Land Rover are among the companies to have halted sales in Russia.