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Three Russian car plants to suspend production on COVID-19, lack of components

March 26/2020

MOSCOW (MRC) -- At least three car plants in Russia plant to suspend operations to prevent the spread of the coronavirus while they also struggle with a lack of components, reported S&P Global.

Volkswagen Group Rus, a Russian distribution and production unit of German automobile manufacturer Volkswagen ,will suspend operations at its plants in Kaluga and Nizhniy Novgordo from March 30 through April 10 due to a lack of components supplied from European plants, the company's spokeswoman told S&P Global Platts Wednesday.

Last year, the combined of the plants was 215,000 cars.

French multinational vehicle manufacturer Groupe PSA said it will suspend output at its plant in Kaluga region over April 1-10, citing the spread of COVID-19 in Russia and globally, the closure of major European car plants, the suspension of component supplies worldwide, potential risks for employees and the Russian government's recommendations.

Volkswagen Group Rus and Groupe PSA's Russian sites together provided roughly 13% of the country's overall car output in 2019. The latter saw output fall 2.5% year on year to 1.5 million cars, according to Russian automotive analyst Autostat.

New car sales in Russia this year are expected to be lower than the 1.6 million-1.7 million sold in 2019, mostly due to sharp depreciation of the ruble in February-March and expected subsequent weakening of solvent demand and car price inflation, both direct consequences of the currency depreciation.

Forecasts for new car sales this year point to a decline of 5%-15%, according to Autostat.

Steel demand from the auto industry may decline by 200,000-300,000 mt given that about 900 kg of steel goes into making one car.

Polypropylene (PP), polycarbonate (PC) and acrylonitrile-butadiene-styrene (ABS) are used in the production of automotive components.

According to MRC's ScanPlast report, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments. At the same time, overall ABS imports to the Russian market decreased in the first month of 2020 by 16% year on year to 2,300 tonnes, according to MRC's DataScope report. This figure was at 2,750 tonnes in January 2019. Imports of material dropped by 6% from 2,440 tonnes a month earlier. ABS imports to the country have continued to decline for the third month in a row.
Author:Margaret Volkova
Tags:PC, PP, ABS, compounding, injection moulding, car components, Volkswagen, Russia.
Category:General News
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