Russian troops are on the move, pushing into two regions of separatist-controlled Ukraine and threatening to invade the rest of the country. But there could be some serious collateral damage to the U.S. and its allies.
In particular, the sanctions could hit an auto industry already struggling to cope with the impact of COVID, semiconductor shortages and other so-called “black swan” events.
President Joe Biden is rolling out an array of what one observer has called “the mother of all sanctions” against the heart of the former Soviet Union. Those measures are meant to convince Russian President Vladimir Putin to step back by crippling his country’s already weak economy.
Russian-owned automakers are expected to face serious challenges, both due to restrictions on foreign parts purchases and Russia’s access to the international monetary transfer system, SWIFT. The Gaz Group, which produces commercial vehicles, buses and auto parts, has warned it may have to shut down due to sanctions.
And a number of foreign-owned automakers, such as Toyota, Volkswagen and Renault, will be hit, as well. Stellantis has a large presence in Russia. Its plant in Kaluga, about 115 miles from Moscow, has been growing as an export base and now supplies the Peugeot Expert, Opel Vivaro and Citroën Jumpy vans for export to Europe and other markets.
Volkswagen, as well as Renault-controlled Avtovaz, said they are studying the situation and have yet to determine what actions they will need to take.
Ironica Russia is also the world’s third-largest source of nickel, a metal critical to lithium-ion batteries.
The two largest US automakers won’t feel a direct hit from sanctions. General Motors started pulling out of Russia in 2015 and the same year Ford announced plans to leave the market.
Russia is also the world’s third-largest source of nickel, a metal critical to lithium-ion batteries. Ironically, shortages of the metal could short-circuit the plans laid out by the Biden administration calling for 50% of the vehicles sold in the US by 2030 to be battery powered.
Source: The Detroit Bureau
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