Mercedes-Benz, Volkswagen Halt Russia Production, Exports -- 2nd Update

03/03/2022 | 12:05pm BST

By Kim Richters and Joshua Kirby

German car makers Mercedes-Benz Group AG and Volkswagen AG are stopping exports of vehicles to Russia and are ceasing Russia-based production until further notice, as a rising number of companies withdraw business from the country after it invaded Ukraine.

Volkswagen, owner of brands like Audi and Skoda, said it has decided to stop production at its Kaluga and Nizhny Novgorod plants.

"All affected employees in Russia will receive short-time working benefits, paid by Volkswagen," the car maker said on Twitter on Thursday.

It has previously warned that it may shutter its flagship plant in Germany later this month because it can't get parts from suppliers in Ukraine.

Meanwhile, Mercedes-Benz said late Wednesday that is suspending the export of passenger cars and vans to Russia, and halting local manufacturing. It said it is still working with suppliers in Ukraine, which provide components for the production of its vehicles, and is closely monitoring the situation.

While all of its plants are currently operating, the auto maker said it will temporarily adjust some shifts at its plant in Sindelfingen, Germany, next week due to the supply-chain issues.

Mercedes-Benz's spun-off commercial-vehicles business Daimler Truck Holding AG has also suspended all business activities in Russia. It recently dismissed media reports that it was contributing parts to the military-vehicle production of Russian truck maker Kamaz, saying the truck parts supplied by Daimler Truck were strictly for non-military vehicles. Mercedes-Benz holds a 15% stake in Kamaz.

Luxury-vehicle peer BMW AG also said it had stopped vehicle exports to Russia and would stop assembly of vehicles in Kaliningrad. Apart from German vehicle manufacturers, French peer Renault SA has said it temporarily shut a plant near Moscow, citing logistical problems.

William Boston contributed to this story.

Write to Kim Richters at [email protected] and Joshua Kirby at [email protected].

(END) Dow Jones Newswires

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