Japanese carmaker Honda has decided to close its Russian subsidiary in 2022. The Japanese carmaker’s decision is part of the company’s efforts to restructure its operations, as sales have fallen sharply month after month.
The Russian subsidiary of the Japanese car manufacturer Honda Motor Co announced on Wednesday that it will stop supplying new cars to dealers in Russia starting in 2022, the decision being part of the company’s efforts to restructure its operations, Reuters reports.
The Japanese company said it would continue to be present in the Russian market through sales of motorcycles and electricity generators. Honda will also continue the activities related to the after-sales services of its vehicles.
Unlike other Japanese carmakers, such as Toyota and Nissan, Honda does not have an assembly plant in Russia. According to the Association of European Businesses, last month Honda sold only 79 vehicles in Russia, down 50% from the same month last year. Also in January-November, Honda sales fell 15% year-on-year to 1,383 vehicles.
In comparison, in the first 11 months of this year more than 1.3 million new cars were sold in Russia. On the other hand, Hyundai Motors is expanding
Hyundai Motor has completed the acquisition of the General Motors (GM) plant in St. Petersburg, announced the spokesperson of the South Korean car manufacturer, Yulia Tikhonravova.
The GM plant in Shushary, a suburb of St. Petersburg, can produce up to 100,000 cars a year. It was built in 2008, but closed in 2015, after the American car manufacturer decided to reduce its international operations.
Hyundai and partner Kia already have a factory in Russia that can produce more than 200,000 cars a year. The two companies sold more than 400,000 vehicles on the Russian market last year, more than Avtovaz, Renault’s largest Russian-controlled carmaker.
“It is too early to announce when production will resume at the Shushary plant due to the coronavirus pandemic (COVID-19),” Tikhonravova said.