Gleb Stolyarov and Alexander Marrow
(Reuters) – Automaker Stellantis (NYSE:) stopped production in Russia in April 2022.
But the decision has not stopped Russian operators from joining forces with a Chinese partner next year to start producing new versions of Stellantis’ Citroen models, according to customs officials and two sources familiar with the matter.
Last December, Russian company Automotive Technologies imported at least 42 vehicle kits to assemble the Citroen C5 Aircross at the Kaluga plant, which is still majority owned by Stellantis, customs records obtained from a commercial trade data provider show.
Data showed that the kits were manufactured in China by the Chinese company Dongfeng Motor Group.
The Automotive Technologies company assembled the Citroen C5 Aircross at the Kaluga plant, according to two employees of different Russian car dealerships. The sources spoke on condition of anonymity because the information is not public.
It is unclear whether the kits from China contained parts subject to Western sanctions on Russia, to which Beijing is not party, and there is no suggestion from customs data or sources that Stellantis knew about the imports.
But the results highlight the lack of control Western companies such as Ikea or Carlsberg (CSE:) have over their brands after suspending operations in Russia or withdrawing from the country following the February 2022 invasion of Ukraine.
They also demonstrate Moscow’s growing dependence on Beijing, especially in the auto industry.
In response to the Reuters findings, Stellantis said that as of December 31, 2023, it concluded that it had “lost control of its businesses in Russia.”
Stellantis said it recognized a loss of 144 million euros ($154.53 million) as a result, including a loss of 87 million euros in cash and cash equivalents.
Chinese state-owned Dongfeng, the Russian Ministry of Industry and Trade and Automotive Technologies did not respond to emailed requests for comment.
The Russian automobile industry relied heavily on investment, equipment and parts from abroad, especially from Europe.
Stellantis blamed logistical difficulties and sanctions imposed on Moscow after operations ceased. It owns 70% of the Kaluga plant, and the remaining 30% belongs to Mitsubishi Motors (OTC:). Before Russia’s invasion of Ukraine, the plant produced Peugeot (OTC:), Citroen, Opel and Mitsubishi cars with an annual capacity of 125,000 vehicles.
PARALLEL IMPORT
Although many foreign automakers have since left the Russian market, some supplies continue to flow into the country under the “parallel import” scheme introduced by Moscow. This allows importers to import products from abroad without the permission of the trademark owner.
Citroen models are still available for sale in Russia, four Russian car dealers told Reuters.
In December 2023, Kaluga manufacturers officially launched the “production of mid-size crossovers.” Reuters was not invited.
Automobile Technologies, registered in Moscow in March 2023 and 100% owned by Galina Dolgolenko, said in December it was assembling a pilot batch of 48 imported cars ahead of the start of mass production in 2024, but did not name the supplier or model of the car. car.
In December, the Russian newspaper Vedomosti quoted Pavel Bezruchenko, director of strategic development at Automobile Technologies, as saying the company imports cars from China using parallel imports.
Bezruchenko did not answer phone calls or respond to messages seeking comment on the situation.
Two car dealership employees told Reuters that Automotive Technologies told them they would receive Citroen C5 Aircross models assembled in Kaluga from imported kits.
However, it is unclear whether the cars coming off the assembly line will retain the Citroen brand.
Russia revived the Soviet-era Moskvich car in 2022, but sources told Reuters that the Moskvich 3 model is a Sehol X4 made by JAC Motors, assembled in Moscow using kits bought from a Chinese partner.
Dongfeng and Stellantis, the world’s third-largest automaker by revenue, operate a commercial joint venture in China through which Dongfeng can manufacture and sell Stellantis vehicles in China.
Chinese automakers are filling the gaps left in Russia by their departing Western rivals, but sales of Chinese cars appear to have peaked at more than 56% of the market as domestic production in Russia has recovered slightly.
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