Report: Japan carmakers slashing Russian production

MOSCOW, Aug 19 (PRIME) -- The protracted economic downturn in Russia is beginning to take a toll on Japanese automakers' output there, Japanese business daily Nikkei reported on Wednesday.

Toyota Motor on Tuesday announced that it halted Russian production of sport utility vehicles at the end of June, switching instead to exports from Japan. A joint venture in Vladivostok with Mitsui & Co. and a local automaker had been turning out Land Cruiser SUVs, but that contract ended and Toyota concluded that continuing the business would be difficult.

Toyota's Russian sales in the first half of this year fell about 30% from the same period of the previous year. Sales in 2014 were strong, rising 6% from the prior year to a record 183,000 vehicles. Since then, however, a slowdown in consumer spending appears to have become more pronounced due to falling commodity prices and a weakening of the ruble.

In 2007, Toyota began producing Camry sedans at a plant it opened in St. Petersburg. It is planning to begin making RAV4 SUVs at that location in 2016. Sluggish automobile sales in Russia have prompted it to consolidate production to that city.

Nissan Motor, which has been producing autos at four Russian sites, saw April-June sales drop 12.6% from the year-earlier period. Concerns about rising inventories have prompted it to reinstitute production cuts first implemented in March.

Mitsubishi Motors has a Russian joint venture plant with France's PSA Peugeot Citroen with the capacity to make roughly 40,000 vehicles a year. That factory suspended production for eight days in late April and early May because of sluggish sales dating back to the end of last year. Output was reduced beginning in May and the site is now operating at just about 70% of capacity, a level it will maintain through September.

Russia's new-car market amounted to 2.49 million vehicles in 2014. However, consumer spending slumped this year due to falling crude oil prices and sanctions imposed by the West as a result of the Ukraine conflict.

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