Volkswagen Continues To Invest In Russia As Europe Increases Sanctions
|   Thursday, March 27, 2014
Volkswagen is not afraid of the sanctions that the European Union will impose of the Russians after the Crimean conflict. The German manufacturer will continue its investment of nearly one billion euro. 

The existing diplomatic conflict between Russia and Ukraine concerning annexation of Crimea is affecting the automotive industry. The Renault brand, which has a major factory in Russia, was concerned by the escalation of the conflict and the creation of a war situation that will affect production.


On the other hand, Volkswagen does not seem to be as pessimistic. The German manufacturer recently said it plans to maintain its policy of expansion for it the sixth largest auto market. 

In an official statement, the group argues that the sanctions the European Union is preparing to apply on the Russians will not have much on an effect on the brand's development.

"I believe we should not scale back our activities [in Russia] because of this" said CEO Martin Winterkorn at a conference in Hanover, Germany.
The German conglomerate is planning an investment of 840 million euro in Russia. The purpose of this capital injection is building a plant in the town of Kaluga, where there is already a site responsible for local Volkswagen and Skoda model production. 

The motivation of the largest automotive group in the old continent is connected to the groupā€˜s sales and ambitions. If last year they delivered 303,000 cars, by 2016 the Germans hope to increase this amount by up to 60 percent, which means 500,000 units per year.

"Our sales numbers continue to look good, but we're paying very close attention to what is happening there," Winterkorn stated. "Investments are still running; we will not stop the [new] engine plant."

The VW Group owns 10.5 percent market share in Russia and managed to sell 37,836 VW, Audi, Skoda and Seat models in the country during the first two months, according to Moscow's Association of European Businesses.

Other major car manufacturers are also carefully monitoring the situation in Russia, like the Bavarians from BMW.
The company's sales in Russia, including the Mini brand deliveries, rose by 12 percent last year to 44,871 vehicles, as opposed to a drop of 6 percent of the country's auto market, according to the same Association of European Business.

"There are risks in the Russian business. We see risks in currency. The ruble has weakened. So long as the crisis does not escalate then we stick to our guidance. If it does, all our statements about our outlook that we made today need to be questioned," said BMW's Chief Financial Officer, Friedrich Eichiner.
Eichiner, summarized that at the BMW's 2013 results conference that the group was "closely monitoring the situation."

Any escalation of the conflict could force BMW to review its plans concerning the ex-Soviet region. He nevertheless added that "of course we've got obligations with our business partners in Russia."
Comments:
Name required * Email required Email not valid *
Comment required *

Latest news
Sunday, August 19, 2018 10:30:31 Nissan is present at the Detroit Auto Show with a compact concept SUV called...
Saturday, August 18, 2018 10:25:17 Another Hyundai premiere at the Detroit Auto Show is the new Veloster N,...
Friday, August 17, 2018 10:20:24 The South Koreans from Kia presented at the Auto Show in Detroit the new...
Thursday, August 16, 2018 10:15:59 After a massive promotion campaign, the US subdivision of Hyundai has officially...
Wednesday, August 15, 2018 10:05:55 Acura boasted that the new RDX is 100% made in the United States and is...
Tuesday, August 14, 2018 09:54:10 At the core of the new VW Jetta is the MQB platform, which is already used...
Tuesday, August 14, 2018 09:50:38 General Motors held the world premiere for the new generation Chevrolet...
Monday, August 13, 2018 09:45:39 The Ram Trucks brand, currently belonging to Fiat Chrysler Automobiles,...
Sunday, August 12, 2018 09:39:52 Ford brought the new generation mid-size Ranger pick-up at the Detroit Auto...
Saturday, August 11, 2018 09:34:13 At the Auto Show in Detroit, American car manufacturer Ford celebrates the...