The largest auto manufacturer in Europe – Volkswagen AG said that it will halt production at its plant situated in Kaluga, Russia for a period of 10 days due to the countrys weakening economy.
According to the companys statement, the falling Russian rouble and declining real wages are some of the reasons why the Kaluga factorys production will be slashed. Automobilwoche reported, without citing sources, that the plants production will be cut from the originally planned 150 000 vehicles to 120 000 in 2014.
One of Volkswagens spokesmen refused to make any comments on these figures, but revealed that the auto maker is to shut its Kaluga plant for 10 days because of the economic situation in Russia. The shutdown is due to start on September 8th.
“Nevertheless Volkswagen Group is fully committed to the Russian market and is consecutively fulfilling its investment programme in Russia,” the spokesman added in a statement, which was cited by Reuters.
This step puts Volkswagen in the ranks of many other European companies, which have been anxious about the sanctions imposed on Russia, especially considering the fact that the Ukraine conflict continues to worsen.
Opels board member responsible for sales, Peter Christian Kuespert also expressed his worries about Russia, which is one of the largest markets of Opel in Europe. As Reuters reported, Kuespert said for Automobilwoche: “There is no doubt that the situation in Russia is a concern. The market has shrunk substantially over the past few months and the Ukraine crisis has added to the uncertainty.”
Volkswagen reported that sales in Russia fell by more than 10% last month, while global deliveries increased by 6.7%.
Volkswagen AG added 0.11% to trade at €179.60 per share by 9:12 GMT, marking a one year change of +4.54%. The company is valued at €85.32 billion. According to the Financial Times, the 29 analysts offering 12-month price targets for Volkswagen AG have a median target of €220.00, with a high estimate of €265.00 and a low estimate of €170.00. The median estimate represents a 22.63% increase from the previous close of €179.40.
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