Toyota is closing its Russian plant; might sell it

Toyota will close its plant in St. Petersburg, Russia, and might sell it, amid shortages of key components and materials following Russia's invasion of Ukraine.

The automaker suspended production at the factory in March following Russia's invasion of Ukraine. It also stopped vehicle imports into Russia.

Toyota said on Friday that over the last six months it has kept the factory ready to resume production if circumstances allowed but it now sees no indication that it can restart output in the future

The factory has a capacity of 100,000 units a year. It produced the Camry midsize sedans and RAV4 crossover SUVs for the Russian market with exports to Belarus, Kazakhstan and Armenia.

"If sold, the plant will not build rebadged versions of the Camry and RAV4," a Toyota Europe spokesman told Automotive News Europe.

The automaker said it will keep a restructured organization in Russia to provide service to existing Toyota and Lexus customers.

Employees will be offered assistance for re-employment, re-skilling and well-being in addition to financial support above legal requirements, Toyota said.

Toyota currently employs 2,350 people in Russia. About 1,900 work at the St Petersburg plant and about 450 are employed in Moscow to oversee marketing, sales and finance operations.

"We think about 2,000 people will leave Toyota in Russia," the Toyota spokesman said. The workforce retained in Moscow will mainly continue to help existing customers in Russia with parts import and distribution.

Toyota sold just 221 vehicles in Russia in August, down 97 percent on the same month last year, according to the Moscow-based AEB Automobile Manufacturers Committee. The total market fell 62 percent to 41,698 units.

Last year, the Saint Petersburg plant built 42,235 RAV4s and 38,547 Camry sedans, according to Toyota.

With 38,441 units sold, the RAV4 was the 11th best-selling model in Russia last year, ahead of the Camry at 31,983 units, figures from the AEB show.

The factory began production in December 2007 after a 38 billion ruble investment (about $680 million at current exchange rates).

Moscow's invasion of Ukraine on Feb. 24 has prompted a mass corporate exodus from Russia, leaving behind assets worth billions of dollars.

Volkswagen and Nissan are among automakers that have suspended production, furloughed workers and halted imports, leaving a gap in the market for Chinese car companies.

More than 750 companies have announced they are curtailing operations there to some degree, according to the Yale School of Management.

In May, Renault sold its majority stake in AvtoVAZ, Russia's biggest automaker and owner of the Lada brand, to a Russian science institute, reportedly for just one ruble with a six-year option to buy it back.

Reuters contributed to this report