BMW Stops Makings Cars In Russia And Halts Exports To The Country

BMW is the latest in a long list of automakers to announce production disruptions following Russia’s invasion of Ukraine. Its collaboration with Avtotor to assemble the car from a semi-knocked-down kit (SKD) suddenly came to a halt “due to the current geopolitical situation.” The statement was made by the company representative while talking to Reuters.

The luxury brand has also stopped exporting cars to Russia for the same reason, until further notice. Separately, a BMW spokesperson told Wall Street Journal: “We condemn the aggression against Ukraine and are following developments with great concern and concern.” In addition, production bottlenecks at other plants outside Russia are expected due to some suppliers based in war-torn Ukraine.

BMW’s decision to put the brakes on car production in Russia comes just weeks after the German manufacturer renewed its partnership with Avtotor until 2028. The Kaliningrad plant will be upgraded to accommodate the full production cycle, not just SKD kits for the country’s best-selling model: the 5 Series, X5, X6, and X7.

When the announcement was made in mid-February, the investment was at least 32 billion RUB representing about $414 million. However, the value of the Russian ruble has plummeted in recent days following sanctions imposed by the European Union and the RUB 32B is now worth just $300 million.

Avtotor does business not only with BMW but also with Kia and Hyundai after terminating previous agreements with Chery Automobile and General Motors. Models such as the Cadillac Escalade and Hummer H2 were built at the Kaliningrad plant before the partnership with GM ended in 2015.