GM, Audi and Jaguar Land Rover suspend sales in Russia over weak ruble

Article by Christian A., on December 21, 2014

General Motors, Audi and Jaguar Land Rover have suspended vehicle sales in Russia in order to lessen the effect of the weakening ruble, which has dropped by more than 40 percent drop since June. In the last few weeks, Russians were purchasing cars like Porsches to convert their savings into something tangible.

While that spelled sales for the auto industry, it actually was for worse since a weaker ruble ate through the profit from selling those vehicles. GM’s Russian unit said the carmaker suspended sales to dealers on Dec. 16 to “manage its business risk” as the ruble remains volatile. GM will deliver only vehicles -- Chevrolet, Opel and Cadillac models -- that have already been purchased at the agreed-on price.

GM has yet to announce when it would resume wholesale deliveries to dealers. Jaguar Land Rover suspended sales until Dec. 19 while Audi temporarily halted deliveries in Russia on Dec. 16. According to Aleksey Kozhukhov, a spokesman for Audi’s Russian operations, the luxury carmaker will resume sales in the country after setting a new price list in the near future.

Audi is also suspending output at its Kaluga plant from Dec. 22, 2014 to Jan. 12, 2015 for a regular holiday break. Arndt Ellinghorst, an analyst with Evercore ISI, remarked that the sudden drop in the value of the ruble is “causing major pain.”

He said that BMW might lose between EUR100 million ($123 million) to EUR150 million in earnings in the fourth quarter if the local currency drops to half its value.

BMW spokesman Nikolai Glies disclosed the luxury brand started reallocating cars to more attractive markets in early summer to trim its Russia-related risks.

Ellinghorst quipped that Daimler, Volkswagen, Renault and Hyundai could suffer from a larger impact. So far, vehicle sales in the country have dropped 12 percent.

If you liked the article, share on:

Comments

Recommended

Just a month ago, Wolfgang Durheimer, the former president of Bugatti, was removed from the company so he could replace Stephan Winkelmann, former Lamborghini CEO and Audi Sport boss as...
by - September 23, 2017
BMW will be launching a new Competition Package especially for the M5’s 2018 model year. While in Frankfurt, Andy Cook, BMW’s product exec has talked with Motor 1 regarding some...
by - September 22, 2017
BMW’s pure M and M-performance are currently being offered with six- and eight-cylinder turbocharged engines. But while German premium rival Mercedes-Benz offers – through its AMG division – a line...
by - September 22, 2017
In a recent report by Automotive News, we learned that FCA is no longer pursuing its original plans in using Alfa Romeo’s Giorgio architecture on both the Dodge Charger and...
by - September 22, 2017
Volvo Cars is proving that it is serious in its intention to grab a good piece of the global market for premium sports utility vehicles. While its XC60 and the...
by - September 22, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries