Honda Motor Co. is now the latest automaker to pull out of the Russian auto market, ending its sales there in 2022. The move is part of some restructuring by the Japanese automaker.
The automaker isn’t exactly a major player in the country, selling 1,383 vehicles through November and that is down 15% from the year prior. Worse still, it sold just 79 vehicles there last month, which is a 50% decline.
The company will continue its motorcycle and power equipment sales as well as its aftermarket service operations for automotive. In recent years, many automakers have pulled their sales and production operations out of the country, including Ford and General Motors in 2019.
There is one exception: Hyundai. The South Korean automaker just completed the purchase of GM’s old St. Petersburg plant just before Christmas. It becomes the company’s second auto plant in St. Petersburg. Located in another part of the city, it builds the Hyundai Solaris and Kia Rio subcompacts and the Hyundai Creta, a subcompact crossover.
The new plant can produce about 100,000 vehicles annually, which adds to the 200,000-vehicle capacity at its plant in the Kamenka district. Hyundai and Kia sold more than 400,000 vehicles combined in the country last year.
As for Honda, its reduction moves weren’t limited to its withdrawal from the Russian market. The company also recently revealed its plans to consolidate some of its automotive operations in India. The company is ending production at its Greater Noida plant, shifting manufacturing of vehicles and components to its Tapukara plant in Rajashtan. The move is effective immediately.
Although production has shifted, the company noted all Head Office functions, India R&D Center and Spare Parts operations (including warehouse) for Automobile, Two Wheeler and Power Product business will continue to operate from Greater Noida.
“Despite an uptick in sales in the last three months, the current market conditions remain unpredictable for the industry at large,” said Gaku Nakanishi, president & CEO, Honda Cars India. “The impact of COVID-19 has pressed us to strengthen our constitution, and to achieve the same, HCIL has decided to consolidate its manufacturing operations by making the Tapukara plant a unified manufacturing base.
“HCIL continues to believe in the resilience of the Indian economy and hope for a quicker recovery of the market. India is extremely important market in Honda’s global strategy and HCIL is committed to bring its latest and advanced technology models including electrified vehicles in future.”
The company’s operations in India are ramping back up after being shuttered to COVID-19 restrictions there. The unit is back to its pre-COVID production levels and sales have risen each of the last three months, officials noted.