Volvo Cars Russia

History

2022

Mass layoffs in Russia

At the end of April 2022, it became known about mass layoffs in the Russian missions of Volvo Cars and Jaguar Land Rover (JLR). According to Kommersant, JLR leaves in the staff only the staff that will be needed to close the legal entity, and Volvo Cars, possibly, and the staff that will provide the warranty service. One of the sources said that companies reduce up to 80% of employees.

Volvo Cars leaves the possibility of dealers accessing car diagnostic systems, "without reducing the possibility of their safe operation," a newspaper source among dealers noted. He added that the Swedish company, unlike Cadillac, behaved "more civilized." Cadillac, according to the interlocutor, disconnected dealers from car condition scanning systems and their updates, "which is unprecedented for world practice." Two more sources of the newspaper among dealers said that Volvo Cars allowed them to reduce staff. One of them said that the company "is calm about the fact that dealerships lead the state to real sales."

Volvo and Land Rover Jaguar reduce 80% of employees in Russia

Due to the imposed Western sanctions, the service of cars of foreign brands is difficult. Sources say that European customs do not issue spare parts due to the fact that sanctions restrictions can be interpreted widely. Under such conditions, distributors are ready to pay dealers for original spare parts imported by them as part of parallel imports, they say. If distributors do not fulfill warranty obligations to buyers, they face bankruptcy, one of the sources explains.

Despite the smaller sales of JLR compared to Volvo Cars and especially BMW and Mercedes, the brand historically has a fairly large fleet in Russia and high loyalty to the brand, says Sergey Udalov from Avtostat. According to him, JLR was one of the highest share of corporate sales in the segment, and the distributor himself actively sold used cars. In general, even small markets are "important" for premium brands, he added.^[1]

Stopping the production and sale of cars in Russia

At the end of February 2022, Volvo stopped the production and sale of cars in Russia amid sanctions imposed by the United States and the EU against the Russian Federation.

Volvo Group is forced to temporarily suspend its activities in Russia and take additional measures to comply with the applicable rules in connection with the military conflict in Ukraine, the situation in the region and the development of sanctions and export control rules, the representative of the Swedish automaker quotes The Wall Street Journal.

Volvo stopped the production and sale of cars in Russia

The company said that deliveries to the Russian market are suspended until further notice, "taking into account potential risks and sanctions." The manufacturer will not supply cars to the Russian Federation "until a special order."

According to the Association of European Business, in 2021, almost 9,100 Volvo cars were sold in Russia in the segment of light and light commercial vehicles, which is 13% more than a year earlier. This accounted for 0.55% 0.55% of the total number of cars sold in Russia in this segment (1,666,780 units).

The manufacturer of commercial and truck vehicles Volvo Group, since 1999 in no way associated with Volvo Cars, also announced the suspension of production and sales in Russia.

In connection with the military conflict in Ukraine, the situation in the region and the developing sanctions and export control rules, the Volvo Group is forced to temporarily cease its activities in Russia and take further measures to comply with the applicable rules, the spokesman for the automaker said. The Volvo Group plant in Kaluga has been operating since 2009.

Volvo is not the only automaker that has decided to freeze the supply of vehicles to the Russian market. This step was also made by Volkswagen and Jaguar Land Rover.^[2]

2020: Recall 9,837 cars in Russia due to defective software

On May 6, 2020, it became known about the recall of 9,837 Volvo cars due to faulty software in the automatic emergency braking system (AEB). More details here.

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