Manufacturers Face ‘Bloodbath’ in Russia, Says Renault Nissan Boss
The chief executive of Renault Nissan, Carlos Ghosn, has said that manufacturers in Russia are facing a “bloodbath” because of the plunge in the value of the rouble.
The currency has been dropping steadily for several months, but suffered very sharp falls earlier this week.
The two firms have stopped taking orders for some new models and raised prices on others.
Several rival manufacturers have taken similar steps.
However, Mr Ghosn said he was confident the situation would stabilise, eventually.
“We didn’t do it [suspend orders] overall, just on some models we said, ‘Sorry, until we see where this situation is going we don’t take orders,'” he told reporters in Tokyo.
“When the rouble sinks it’s a bloodbath for everybody. It’s red ink, people are losing money, all car manufacturers are losing money,” he added.
The French-Japanese Renault-Nissan alliance is a major player in Russia’s car industry.
Not only does it sell vehicles under its own brands, it also controls the domestic manufacturer Avtovaz, better known as the maker of Lada cars.
Mr Ghosn said the group had suspended taking orders for some models, this included cars made in Russia, but also those which used large quantities of imported parts. Orders already placed would be honoured, he said.
Other manufacturers have been taking similar steps in response to the decline of the rouble, which has halved in value against the dollar this year.
General Motors, Audi and Jaguar Land Rover also suspended deliveries to Russian dealers earlier this week.
If car sales in Russia do continue to decline, it could affect British manufacturing. Nissan says about 10% of the cars made at its Sunderland plant are exported to the region.
“I certainly think there could be a potential impact on Nissan’s operations in the UK,” said David Bailey, professor of industry at Aston Business School.
“It sells for example the Qashqai model in large numbers in Russia.”
He said it could also have an impact on the premium end of Jaguar Land Rover, “albeit far less than in the case of Nissan”