When Russia invaded Ukraine in February 2022, hundreds of Western companies vowed to withdraw from the Russian market in protest. But three years later, as the war continues, a report by the Kiev University of Economics reveals that of the 4,000 international companies operating in Russia before the invasion, only 440 (just 10%) have completely withdrawn. do not have.
Germany’s three largest luxury automakers (Mercedes, BMW and Audi) are among the companies that have announced their exit from Russia, where the wealthy’s desire for luxury German cars has long supported their lucrative business. Ta. Let’s take a look at what these companies promised and what they actually delivered, despite EU sanctions explicitly banning luxury car exports to Russia.
mercedes
mercedes benz Estimation The company’s assets in Russia are expected to be 2 billion euros by the end of 2021. The Mercedes plant in Moscow employs 1,000 people and began operations in 2019, producing the E-Class sedan and SUV. At the end of 2021, Mercedes-Benz held a 2.6% share of the Russian car market and sold 43,000 cars.
March 3, 2022, Mercedes-Benz declared “Until further notice, we are suspending exports of cars and vans to Russia, as well as local manufacturing in Russia.” It soon became clear that the car manufacturer had decided to freeze its operations in Russia and completely withdraw from the market. Further notification came in October 2022, when the company announced it would sell its stake in its industrial and financial services subsidiary to local investor Avtodom Automobile Holding.
The agreement, signed in April 2023, includes the assembly plant of Mercedes-Benz Manufacturing Russia in Moscow Oblast, local distributors, corporate banks and all leasing subsidiaries of the brand in Russia. It included the sale of assets.In 2022, sales in Russia decreased by 78% to 9,595 units, and in 2023, 1,528 units were sold. Avtodom said it plans to produce cars under its own brand, although Mercedes retains the option to buy back the Russian operations at market price.
The German automaker later restricted access to software for Russian car dealers, including online systems used for maintenance and troubleshooting. Restricting access to official software made the service somewhat complicated and caused inconvenience to Russian Mercedes owners, but market players found a workaround. For example, you can download the necessary service programs for offline use or change your geolocation to connect to the system as if you were in another country.
The official Mercedes website in Russia has been discontinued.
“As of April 24, 2023, Mercedes-Benz AG will cease its activities on the Russian market,” the main page reads.
Despite Mercedes’ withdrawal and EU sanctions (the European Union’s ban on luxury car exports to Russia imposed on March 15, 2022) New cars continue to enter the Russian market through so-called parallel imports. This means that goods can be brought into Russia via third countries without the manufacturer’s consent. According to Russian media, some automakers are aware of and support the parallel import system.
Former Mercedes official distributor MB RUS, Continue Selling new Mercedes cars in Russia, introduced Guarantee for vehicles brought into the country through parallel import. in letter Mercedes told B4 Ukraine that it conducts audits of certified partners to minimize the risk of sanctions evasion, but that parallel imports are beyond its sphere of influence.
“Mercedes-Benz condemns Russia’s attack on Ukraine, and our thoughts continue to be with the Ukrainian people,” the automaker said in the letter.
audi
In 2021, Audi sold 16,404 cars in Russia, an increase of 7.05% from 15,247 cars in the previous year. In March 2022, Audi, like its parent company Volkswagen AG Group, announced Suspension of automobile deliveries to Russia. Audi did not have its own production facilities in the country, while Volkswagen decided to halt vehicle production at two Russian plants “in response to Russia’s attack on Ukraine.”
“The Volkswagen Group is deeply disappointed and shocked by the news regarding the war in Ukraine. Volkswagen continues to wish for a cessation of hostilities and a return to diplomacy,” the initial announcement read.
Volkswagen in 2023 sold off While closing a local subsidiary and a factory south of Moscow, Audi cut off its former dealers from its software. The contract value was 125 million euros. according to some estimateVolkswagen’s total investments in Russia since 2007 amount to 1.8 billion euros. Audi is said The company says it no longer supplies cars directly or indirectly to Russia. In 2022, 3,512 Audi cars were sold in Russia. In 2023, this number has decreased by 90% to 335 units.
Audi’s official Russian website is currently not operational. However, unlike Mercedes, the company admits it is still shipping spare parts.
“The remaining small supply of spare parts to Russia will be subject to individual sanctions compliance review prior to export,” the company said.
Audi emphasizes that all importers must take appropriate measures to prevent the resale of cars to Russia. but, Russians can still buy old Audi cars as new cars. authorized dealer.
“Currently, there are no authorized importers in Russia to import our vehicles. If our branded vehicles are sold in Russia, they are outside the sphere of influence of Audi AG,” the company said. stated in a letter to B4 Ukraine.
BMW
According to the European Business Association, Approximately 46,800 new BMW cars were sold in Russia in 2021, giving the company a 2.8% share of the Russian car market.This was approximately 3,800 more units than Mercedes-Benz and nearly three times as many as Audi.
At the beginning of Russia’s large-scale invasion of Ukraine, BMW released A clear statement: “We condemn aggression against Ukraine.” In reality, however, the automaker has chosen perhaps the most moderate approach of the German Big Three when it comes to operating its operations in Russia.
BMW has suspended vehicle exports to Russia and assembly at a partner facility in Kaliningrad, with official sales plummeting to just 505 vehicles in 2023. However, the company maintained a significant presence through its Russian subsidiary BMW Rusland Trading. While publicly downsizing operations and reducing staff, BMW actually expanded its footprint in July 2023 By establishing new spare parts supply lines and expanding “warehousing and storage” operations. The company continues to provide official spare parts and warranty services, and in September 2023, a Russian dealer noted that BMW was “getting a better feel than other manufacturers” on the market.
BMW, like Audi and Mercedes, cut Russian dealers from its software, but sellers say the move was largely symbolic. russian media report One seller even said that BMW’s representative office itself provides remote access to connect to the dealer’s database, allowing him to bypass the restrictions.
bmw russian Website It remains active and regularly updated with new models, but no recommended prices are listed. The website also features nearly new 2024 cars priced at over 50,000 euros. Authorized dealers listed on the BMW website continue to sell used and new cars through their platform. BMW appears to be continuing to work with dealers bringing cars into Russia. claim that “We do not authorize Russian third-party dealers to sell new cars.”
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Germany’s big three luxury automakers have publicly halted production and exports in Russia, but the actual withdrawals vary widely. Cars from all three brands continue to enter Russia through parallel imports, but BMW’s approach stands out as particularly questionable.
While Mercedes makes great strides and Audi maintains a limited parts supply, BMW continues to actively operate its Russian website, advertising new cars and listing dealers that openly sell parallel imported cars. There is. Their claims of not allowing these sales ring hollow considering their own digital infrastructure facilitates them. The contrast between public statements and actions reveals how some companies maintain profitable operations in Russia while trying to maintain their reputations in the West.
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