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The auto industry in Russia has been at a standstill since the invasion of Ukraine began on February 24. Almost every major manufacturer has left the country or has discontinued local operations and Volkswagen is no different. The German company is now trying to minimize financial losses to its business and is reportedly offering rewards to local employees if they agree to quit VW voluntarily.
Reuters reports that the automaker is negotiating with its workforce at its car factory in the city of Nizhny Novogorod, offering financial compensation and health insurance until the end of the year. About 200 people working at the plant were offered compensation after Volkswagen announced in March this year that production in Nizhny Novgorod would be suspended until further notice. According to available information, employees who agree to leave the company before June 17 will receive six months’ salary.
Volkswagen operates two production plants in Russia. The one in Nizhny Novgorod is not owned by the German manufacturer, which has an agreement with local automaker GAZ Group. The Volkswagen group produced the Volkswagen Polo and Taos, as well as the Skoda Kodiaq, Karoq and Kamiq, but assembly lines were discontinued shortly after the Russian invasion of Ukraine began. VAG also has a factory in the city of Kaluga which employs about 4,200 people.
Volkswagen is not the only automaker struggling with its Russian operations. Renault had to sell its controlling stake in AvtoVAZ and the plant it previously operated was now controlled by the City of Moscow. There were rumors of a possible revival of Moskvitch, the former Soviet-era automaker. The wildest speculation even claims the brand could return as an EV automaker.
Other companies that have suspended operations in Russia include Mitsubishi, Ford, Suzuki, Toyota, Honda, BMW and others. Most of them no longer manufacture and import cars into the country as a result of Western sanctions.
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