Scania has suspended exports of trucks from the São Bernardo do Campo plant to Russia. The Brazilian subsidiary follows the decision of the parent company in Sweden, which halted sales in the Russian market after President Vladimir Putin decided to invade Ukraine last week. The company did not inform how many vehicles will no longer be sold, nor the impact on production at the plant in the São Paulo state. Scania was the only manufacturer that exported vehicles from Brazil to Russia.
After changing its internal strategy, four years ago, the company stopped disclosing production and sales figures. But it is known that the Russian market was among the company’s foreign markets a few years ago. Three years ago, the company announced an investment plan of R$1.4 billion, aimed mainly at modernizing the São Bernardo plant, which employs 4,000.
The unit was modernized to continue to be an export hub. The latest investment program includes adapting any model to the clean energy defined in each country. A statement from Scania Latin America reproduces the company’s worldwide position regarding the conflict in Ukraine.
“Scania’s values of democracy, free trade, human rights and respect for the individual guide all company decisions.” About the recent events in Ukraine and Russia, the Swedish manufacturer said that it is continuously monitoring it closely and since last week has decided to stop deliveries of trucks and spare parts to Russia. “We continue to prioritize the safety of our employees and have been in close dialogue with our customers, suppliers and other partners to assist them in any way we can at this difficult time for humankind,” Scania said.
Some auto parts manufacturers also export from Brazil to Russia. But, in their cases, Russia is a less important destination. According to data from the National Union of the Components Industry (Sindipeças), the Russian market is in 26th place, with $26 million out of a total of $6.5 billion earned by companies in the sector with foreign sales in 2021.
The Russian vehicle market is smaller than the Brazilian one. Yet it is among the 15 largest in the world, with annual sales of around 1.7 million units. This is more than the United Kingdom or French markets sell. The Russian vehicle fleet is, however, larger than that of Brazil. There are almost 52 million vehicles on Russian roads, according to data from five years ago, while the Brazilian fleet was around 46 million in 2020.
Like Brazil, Russia is an important vehicle production center. Brazil is in the eighth position among the world’s largest producers. Russia ranked 13th in 2019.
Also like Brazil, most of the automakers active in Russia are multinationals, mainly European ones. Some have alliances with local manufacturers. As foreign companies have already chosen to suspend business in the country since the beginning of the conflict in Ukraine, the activity of the automobile industry in that country tends to be quite compromised.
French Renault, German Volkswagen and Stellantis (which includes Fiat, Chrysler, Peugeot and Citroën) have the largest operations in Russia. General Motors had stopped producing in the country a few years ago as a result of a global reorganization. Some cars produced in Brazil have already been inspired by models developed in Russia.
Volvo Cars was one of the first to react to the invasion of Ukraine, suspending the shipment of cars to Russia. In the case of the brands that produce locally, there is also a lack of components that, in good part, were supplied by Ukraine.
German company BMW will halt exports and production at its plant in Kaliningrad, on the Baltic Sea, “due to the geopolitical situation,” the company said in a statement.
According to news agency reports, Honda has suspended the shipment of cars and motorcycles to the Russian market since this Thursday. The company follows decisions already taken by Mercedes-Benz, Jaguar and Land Rover. Mercedes announced the donation of one million euros to the Red Cross in Ukraine.
Source: Valor International