Ending All Operations Indefinitely, The Volkswagen Factory In Russia

The German automaker, Volkswagen Group will shut down their plant in Nizhny Novgorod, Russia, where VW and Skoda brand vehicles were being assembled. 

Said plant was run under contract by Russian automotive manufacturer, Gorkovsky Avtomobilny Zavod (GAZ), but a lack of parts and logistics troubles have pushed VW to back out.

According to Reuters, the company initially only suspended production at its Kaluga and Nizhny Novogorod plants in March, though now, VW is ending its operations at the latter for good.

Volkswagen made its announcement to employees at the plant with a reasoning pointing towards the lack of EU-produced parts, Reuters further stated.

Specifically, they are critical components from Ukraine and lack of domestically made equivalents, disruption of logistics chains and inability to predict the terms and conditions of resumption of work.

All production equipment and other machinery at the plant will be moved to VW’s factory in Kaluga, which the automaker owns directly and employs around 4,200 workers.

Conversely, just 200 workers were employed at the Nizhny Novgorod plant, where the majority of them were offered, and had already taken buyouts and quit voluntarily.

On top of that, the factory’s office was closed on July 5 due to a high level of uncertainty and the inability to predict the potential resumption of production, stated Volkswagen.

Due to that decision, the German automaker said that 60 people will be affected by the closure of the office.

Elsewhere, ever since the contract between VW and GAZ in 2011 was made, the factory has assembled more than 400,000 vehicles using complete knockdown kits.

Most recently, the Nizhny Novgorod plant produced the Volkswagen Taos, as well as the Skoda Kodiaq, Karoq, and Octavia models. 

In short, despite the issues faced, GAZ reportedly does not intend to close the plant, and is looking for other solutions.