Foreign automakers — not much to lose from exiting Russia

  • The Russian government has threatened to nationalise these companies’ assets
  • Higher commodity prices (increasing vehicle prices by USD500–2,000) and supply chain disruptions aggravated by the war are bigger concerns facing foreign automakers than exiting Russia
  • Russia’s auto landscape is likely to undergo a steep transformation, with local and Chinese players gaining large market shares, while ruble devaluation and higher inflation could lead to a sharp decline in registrations
  • New-car sales collapsed by 63% y/y in March 2022, the first full month of sales after international automakers exited the country
  • Neon gas: Ukraine accounts for 70% of global semiconductor-grade neon supply; this is used to power lasers needed to manufacture semiconductor chips. Although chip companies have 12 months of inventory of neon gas, a prolonged war could hamper production recovery.

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Acuity Knowledge Partners

Acuity Knowledge Partners

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/