Automotive sector in crisis
The automotive sector will be hit hard by the closure of the Russian market. Many companies are already experiencing problems.
The French Renault, among others, is exposed to problems. The company has so far invested over USD 2 billion in Russia. According to estimates by the Fitch agency, last year as much as 10 percent of Renault’s revenues came from Russia. The blockade of this market will hinder the company’s investments. Two years ago, Renault borrowed around €5 billion from the French government in the wake of the pandemic outbreak. The company was planning to restructure. It wanted to lay off around 15,000 employees. In the current situation, the cuts may be greater.
Stellantis and the Korean Hyundai are also heavily dependent on the Russian market.
However, the entire automotive sector will feel the effects of the closure of the Russian market. Wojciech Drzewiecki, president of the Automotive Market Research Institute Samar, explains that the industry is facing a crisis bigger than the one resulting from the problems with chips. In the long run, the whole sector will suffer, also in Poland. Jakub Faryś, president of the Polish Automotive Industry Association, says that closing down the Russian market will result in fewer cars, higher prices and more difficult production.