FAQs – Ukraine

Russia/Ukraine FAQs – PDF download

Dear journalists,

We try our utmost to inform you as fast and transparent as possible about the current situation in Ukraine.
For this reason, please find below the current set of frequently asked questions.
We will update this page on a regular basis.

Last update: 22.06.2022.



Official statement:

The Volkswagen Group has received the news about the war in Ukraine with dismay and shock. Volkswagen continues to hope for a cessation of hostilities and a return to diplomacy. We are convinced that a sustainable solution to the conflict can only be found based on international law.

In view of the Russian attack on Ukraine and the consequences of this, the Group Board of Management of Volkswagen AG has decided to halt the production of vehicles in Russia until further notice. This decision applies to the Russian production sites in Kaluga and Nizhny Novgorod. Likewise, vehicle exports to Russia were stopped until further notice.

By largely suspending business activities in Russia, the Group’s Board of Management is responding to the overall situation, which is characterised by significant uncertainty and disruption.


 

1. ŠKODA AUTO business activities and presence on the Russian market

Does Russia’s invasion of Ukraine change anything regarding your business? Are any plans being reassessed? Might you scale back your activities?
Volkswagen Group Rus has suspended production in Russia until further notice. We are reviewing current developments constantly. Due to high level of uncertainty in the overall situation we are unable to predict any potential restart of production in Russia at the moment. Due to the high complexity of the production planning process and unpredictability of the general situation, at the moment we are not able to plan any production volumes for 2022.

The Volkswagen Group Rus employees are staying in downtime. During the downtime the wages of Volkswagen Group Rus employees will continue to be paid.

Does ŠKODA AUTO still have responsibility for the Russian and Ukrainian markets?
Yes. As of 2022, ŠKODA is fully responsible for the management and financial governance of the Russian region.

How many cars will not be produced this year due to the closure of Russian production plants?
The Russian market is one of ŠKODA’s most important markets globally. In 2021, Russia was the brand’s second-largest market; a total of 90,400 ŠKODA vehicles were delivered to customers there. For the time being, it is impossible to determine the exact number of vehicles that will not be produced in 2022.

Where do Russia and Ukraine rank among your export markets?
The Russian market is one of ŠKODA’s most important markets globally. In 2021, Russia was the second-largest market overall. A total of 90,400 ŠKODA vehicles were delivered there.
Ukraine has also been a stable market, with sales of around 6,000 ŠKODA vehicles a year. Since 2002, approximately 190,000 ŠKODAs have been produced at the plant in Ukraine.

How will the war in Ukraine affect your production this year? 
We are monitoring the situation, and it is not possible to estimate the impact on production at the moment.

How big was the Russian market for you?
The Russian market is one of ŠKODA’s most important markets globally. In 2021, Russia was the brand’s second-largest market; a total of 90,400 ŠKODA vehicles were delivered to customers there.

Will ŠKODA be exporting cars to Russia?
In view of the Russian attack on Ukraine and the consequences of it, the Volkswagen Group’s Board of Management has decided to stop exporting cars to Russia with immediate effect.

We continue to monitor the situation at the level of ŠKODA AUTO and the Volkswagen Group. We will not be making any further comments on the future strategy for the Russian market at this time.

Is Volkswagen leaving Russia entirely?
In view of the Russian attack on Ukraine and the consequences of it, the Volkswagen Group’s Board of Management has decided to suspend vehicle production in Russia until further notice with immediate effect. This decision applies to the Russian production plants in Kaluga and Nizhny Novgorod.

We also stopped vehicle exports to Russia with immediate effect.

By suspending business activities in Russia, the Volkswagen Group’s Board of Management is responding to the overall situation, which is characterised by considerable uncertainty and disruption.

We continue to monitor the situation at the level of ŠKODA AUTO and the Volkswagen Group. We will not be making any further comments on the future strategy for the Russian market at this time.

Do you ever plan on resuming production activities in Russia?
Volkswagen Group Rus has suspended production in Russia until further notice. We are reviewing current developments constantly. Due to high level of uncertainty in the overall situation we are unable to predict any potential restart of production in Russia at the moment. Due to the high complexity of the production planning process and unpredictability of the general situation, at the moment we are not able to plan any production volumes for 2022.

The Volkswagen Group Rus employees are staying in downtime. During the downtime the wages of Volkswagen Group Rus employees will continue to be paid.

What will leaving the Russian market mean for you in terms of financial losses?
At this time, it is impossible to determine exactly what impact this will have on ŠKODA AUTO’s financial performance. The issue is being addressed at the level of ŠKODA AUTO and the Volkswagen Group.

Will you be relocating production from Russia to another site and where would that be? Do you have free capacity for this?At the moment, it is too early to predict how the production programme will be replaced. We continue to monitor the situation at the level of ŠKODA AUTO and the Volkswagen Group. We will not be making any further comments on the future strategy for the Russian market at this time.

2. Sites in Ukraine and Russia (Solomonovo, Nizhny Novgorod and Kaluga)

2.1. Production in Ukraine and Russia

What vehicles and how many do you produce at the Ukrainian plant in Solomonovo? Is production still running there?
We produce cars in Ukraine by applying the SKD format, namely the SUPERB, KODIAQ, KAROQ and FABIA COMBI. Production in Ukraine is handled by our business partner Eurocar. Production of ŠKODA vehicles is currently suspended at the Solomonovo plant.

What models do you produce in Ukraine?
The cars are in Ukraine are produced by applying the SKD format, namely the SUPERB, KODIAQ, KAROQ and FABIA COMBI models for the local market. Production in Ukraine is handled by our business partner Eurocar. Production in Ukraine at the Solomonovo plant is currently suspended.

What markets are ŠKODA cars made in Ukraine destined for?
Cars produced at the Solomonovo plant are intended for customers in the Ukrainian market only.

Were cars produced there shipped to Germany/Western Europe?
The cars produced at the Solomonovo plant are intended only for customers in the Ukrainian market.

What ŠKODA models are manufactured in Russia? Is production currently underway in Nizhny Novgorod and Kaluga?
In Russia, we produce the RAPID, OCTAVIA, KAROQ and KODIAQ. In Nizhny Novgorod, we produce three models – the OCTAVIA, KAROQ and KODIAQ. The RAPID is produced at our Kaluga plant.

Volkswagen Group Rus has suspended production in Russia until further notice. We are reviewing current developments constantly. Due to high level of uncertainty in the overall situation we are unable to predict any potential restart of production in Russia at the moment. Due to the high complexity of the production planning process and unpredictability of the general situation, at the moment we are not able to plan any production volumes for 2022.

What will now happen to the Kaluga plant, which is owned by the Volkswagen Group? What purpose will it serve?
At this time, it is too early to predict future developments. The topic is being addressed at the level of ŠKODA AUTO and the Volkswagen Group

Have any Volkswagen Group cars been produced in Russia and exported to other markets?
Cars produced at Russian Volkswagen Group plants are also intended for export to CIS countries (Belarus, Azerbaijan, Kazakhstan, Armenia, Tajikistan, Uzbekistan).

Volkswagen Group Rus has suspended production in Russia until further notice. We are reviewing current developments constantly. Due to high level of uncertainty in the overall situation we are unable to predict any potential restart of production in Russia at the moment. Due to the high complexity of the production planning process and unpredictability of the general situation, at the moment we are not able to plan any production volumes for 2022.

2.2. Employees in Ukraine and Russia

How many people do you employ in Russia and Ukraine?
Vehicle production in Ukraine is handled by our business partner Eurocar and its local employees. No ŠKODA AUTO employees are assigned there. All of our employees have already returned from their assignment in Russia.

What is the employees’ situation at the factory in Ukraine and how long will production be suspended? What is the status of production at the plants in Russia?
Production at Solomonovo in Ukraine, which is handled by our business partner Eurocar, is currently suspended due to the current situation.

In view of the Russian attack on Ukraine and the consequences of this, the Group Board of Management of Volkswagen AG has decided to halt the production of vehicles in Russia until further notice with immediate effect. This decision applies to the Russian production sites in Kaluga and Nizhny Novgorod.

What is going to happen to your Russian employees at the Russian plants in Kaluga, Nizhny Novgorod and Moscow?
Intensive negotiations, which also involve the trade unions, are currently underway at the Group level. At the same time, the Volkswagen Group’s Board of Management takes its responsibility for the affected employees of Volkswagen Group RUS very seriously. These employees in Russia will receive appropriate wage compensation, the cost of which will be covered by the Volkswagen Group.

2.3. Suppliers in Ukraine and Russia

How many suppliers do you have in Ukraine in total?
The number of suppliers is relatively small, namely three direct suppliers and two other suppliers supplying just-in-sequence (‘JIS’). In addition, ŠKODA AUTO has another five subcontractors there. The supply chain is being assessed with the aim of defining additional subcontractors so that further risks to the supply can be eliminated.

What about suppliers in Ukraine and Russia? Are you suspending cooperation with Russian suppliers as well? Where will you source the missing parts from?
We are working closely with our Ukrainian partners to find ways to secure production at our suppliers’ sites, while keeping the employees as safe as possible. We are maintaining our business relationship with our Ukraine suppliers.

In Russia, some Western suppliers were producing for us in small amounts. The supply chain is being assessed to identify alternative suppliers so that further risks to supply can be eliminated.

In Russia, it seems that many cars are produced locally for the local market. Are supplier parts also produced locally?
Parts are produced locally. This is in accordance with our global strategy to produce locally for local markets to a higher extent.

In view of the Russian attack on Ukraine and the consequences of this, the Group Board of Management of Volkswagen AG has decided to halt the production of vehicles in Russia until further notice with immediate effect. This decision applies to the Russian production sites in Kaluga and Nizhny Novgorod. Likewise, vehicle exports to Russia will be stopped with immediate effect.

What is ŠKODA AUTO doing to secure the sources of material and components that are either produced in or pass through Ukraine?
We remain fully committed to our Ukrainian partners. Most of them continue with the production – for this, they have our deepest respect. At the same time, in cooperation with them, we have decided to temporarily duplicate production of cable harnesses in some other countries and therefore to ensure smooth production in the long term and also to pre eliminate possible risks.

Where do you duplicate the production of cable harnesses?
As the first step of doubling the production, in collaboration with PEKM Kabeltechnik, ŠKODA AUTO has already relocated a part of the production of cable harnesses, including several dozen employees, from Ukraine to Mladá Boleslav. The production was relocated within only five weeks after the breakout of the war. Duplicated production has gradually ramped up from CW 14, at the moment the FABIA COMBI cable harnesses are being made there and within the next few weeks, the production of wiring harnesses for the OCTAVIA, KODIAQ, KAROQ and SUPERB models will start in Mladá Boleslav.

To what extent do existing or new sanctions affect Volkswagen's cooperation with the contractor manufacturer in the plant in Nizhny Novgorod?
Against the background of the Russian attack on Ukraine and the resulting consequences, the Group Board of Management of Volkswagen AG has decided to stop the production of vehicles in Russia until further notice. This decision applies to the Russian production sites in Kaluga and Nizhny Novgorod.
Vehicle exports to Russia were also stopped with immediate effect.

With the extensive interruption of business activities in Russia, the Executive Board is reviewing the consequences from the overall situation, which is characterized by great uncertainty and the current upheavals.

Volkswagen Group RUS has operated a contract manufacturing facility at GAZ in Nizhny Novgorod since 2011. GAZ and majority owner Oleg Deripaska have been on the US sanctions list since April 2018. Since then, the continuation of production at GAZ has been subject to a General License (GL) issued by the competent US authority OFAC. The general licence was extended at the end of January 2022.

3. Impacts for ŠKODA AUTO in the Czech Republic

3.1. Car production in the Czech Republic

Are you facing supply shortages due to the situation in Ukraine? If so, are these the only suppliers for Europe and Russia and do you have no alternative?
The Volkswagen Group's global supplier network, which comprises more than 40,000 suppliers, also includes a number of suppliers in western Ukraine. Due to the current situation in this region, there may be disruptions in the supply chain. This can lead to adjustments in production at individual Group locations. In order to optimally cope with the situation, VW Group and ŠKODA set up a dedicated Taskforce team.

What is the current situation regarding production?
The situation is gradually stabilising. The Kvasiny plant with the KAROQ, KODIAQ and SUPERB models currently offers the best coverage of the production programme. In the short term, we expect the production capacity to be restored in Mladá Boleslav over the coming weeks, including full production of our all-electric ENYAQ iV. However, the long-term outlook remains uncertain, primarily due to the ongoing semiconductor shortage.

3.2. Sales

What is the current situation with customer orders?
ŠKODA AUTO’s team of specialists is working hard to ensure the supply of the missing parts. We will process customers’ orders according to the supply of these parts.

Are any models and powertrain configurations being prioritised in production?
We are managing our production based on the availability of parts and the queue position of the order.

Will the availability of vehicles be the same in all markets or will it vary?
We will be processing orders for cars according to the supply of parts.

On what basis, if any, are quotas for allocating cars to the various regions determined?
We produce cars on a first-come, first-served basis and according to the availability of parts.

Which model will now have the shortest and, conversely, the longest waiting time? And how long will the waiting times be?
We are reviewing and continually monitor the situation and its impact on waiting times, which have already been affected by the global crisis stemming from the semiconductor shortage.

What effect will inflation have on ŠKODA’s prices?
Along with the automotive sector and other manufacturers, ŠKODA AUTO is facing the most significant rise in inflation in several years.

We are experiencing several inflationary pressures, caused not only by the Volkswagen Group’s decision to halt production in and exports to Russia as a result of its attacks on Ukraine but also due to a critical shortage of parts from several Ukrainian suppliers, which is affecting the production of some ŠKODA models.

In addition, input and energy prices have increased. All of this has led to a rise in corporate costs, and therefore, we cannot rule out the possibility of our car prices increasing in the future. However, we are taking all possible countermeasures to minimize the impact of these developments, including hedging transactions and negotiating long-term contracts with our suppliers. At the same time, we are responding with increased cost discipline and the introduction of an extensive combined efficiency improvement programme. While these measures will reduce the impact of price increases on our operations, unfortunately, they cannot fully offset them.

Will the situation in 2022 be even worse than in 2021?
Despite all the challenges, 2021 was a good year for ŠKODA AUTO. During the semiconductor supply crisis, which was particularly critical in the third quarter of last year, we took every step to produce as many cars as possible. That is also why we ultimately managed to deliver a total of 878,200 vehicles to customers worldwide. The all-electric ENYAQ iV successfully entered the market with almost 45,000 vehicles being delivered. Thanks to the new KUSHAQ, ŠKODA AUTO also grew significantly in India.

2022 will be no less challenging for ŠKODA AUTO. The ongoing shortage of semiconductors, coupled with the termination of production in Russia, the shortage of parts for the production of ŠKODA models supplied from war-torn Ukraine, supply chain issues, as well as the continuing uncertainty on the global markets and the rising prices of energy, raw materials and other inputs, will continue to weigh heavily on 2022. However, we still enjoy strong customer demand. Moreover, we believe that with its NEXT LEVEL – ŠKODA STRATEGY 2030, the automaker is well-positioned over the long term to emerge stronger from the transformation process despite this extremely challenging situation.

3.3. Employees in the Czech Republic

How many Russian and Ukrainian employees do you have at your Czech plants?
We have 615 Ukrainian and several dozen Russian colleagues working at our Czech plants.

What is your approach to the possibility of ‘Kurzarbeit’?
ŠKODA AUTO would welcome the possibility of a long-term instrument such as the German ‘Kurzarbeit’ system (‘short-time work’) to help employers overcome potential economic difficulties and to ensure flexibility in the labour market in similar situations.

Is ŠKODA recruiting/planning to recruit Ukrainian refugees? Have you received any interest?
Anyone from Ukraine can apply for a position at ŠKODA AUTO following the standard selection procedure. The full range of vacancies at ŠKODA AUTO is available on www.skoda-kariera.cz and www.job4ua.cz. We are currently offering positions in IT, as well as electrical specialists in Development or Production as well as specialists with experience in Purchasing and Supply Chain Management.

ŠKODA AUTO has prepared a Career Day event for people from Ukraine. There have been four successful sessions to date. This is a project that aims to provide job seekers with support and guidance so that they can make the best possible transition into the labour market. Among other things, we are also assisting women who are looking for work with creating a CV or finding a suitable position.

Are you planning to lay off employees?
The current conflict in Ukraine is also impacting ŠKODA AUTO’s production. We are working with the KOVO trade union to handle the impact of this conflict on our employees as effectively as possible.

3.4. Suppliers

Is the shortage of the supply of raw materials from Russia already having any impact? How much more expensive are these raw materials becoming?
Neither risks in the supply of raw materials nor increases in their price can be ruled out at present. ŠKODA AUTO is constantly monitoring the situation regarding the capacity and demand for essential raw materials and parts. In collaboration with our suppliers, we are taking appropriate long-term measures to secure these.

What is your gas consumption? How would cutting off gas supplies from Russia affect you? Are you preparing for this?
The annual gas consumption of ŠKODA AUTO’s domestic plants amounts to less than 0.5% of the Czech Republic’s total consumption. However, the technologies of our paint shops and smelters are dependent on gas supplies, so any reduction would have a significant impact on production.
ŠKODA AUTO is constantly monitoring the situation regarding the capacity and demand for essential raw materials and parts. In collaboration with our suppliers, we are taking appropriate long-term measures to secure these.

3.5. Volkswagen Group RUS

How many employees does Volkswagen have in Russia?
Nearly 4,000 Volkswagen Group RUS employees work at the Kaluga plant in Russia. In Nizhny Novgorod and Moscow, there are more than 200 and nearly 600 Volkswagen Group RUS employees, respectively.

What cars of the other Group brands are produced in Russia?
The Volkswagen Tiguan and Polo are also produced in Kaluga.
The Volkswagen Taos is also produced in Nizhny Novgorod.

Vehicle deliveries to customers in Russia in 2021

Brand Vehicle deliveries to customers in 2021
VW Passenger cars 86,100
ŠKODA 90,400
Total 176,500

 

Further information about Volkswagen Group RUS can be found here.
Further information about the Kaluga plant can be found here.
Further information about the Nizhny Novgorod production plant can be found here.
 

4. Help measures

How are you helping the families of these employees following Russia’s invasion of Ukraine?
The Volkswagen Group, including all its brands, has donated one million euros to the UN Refugee Aid Agency. ŠKODA AUTO is also contributing to this donation.

In addition to this support, the company is pursuing other humanitarian efforts in collaboration with its social partner, the KOVO trade union.

Financial aid

● ŠKODA AUTO has donated CZK 10 million to the Czech non-profit NGO ‘People in Need’ (‘Člověk v tísni’).

● The town of Mladá Boleslav has organized a fundraiser for the hospital in the Ukrainian partner town of Tiačiv, to which ŠKODA AUTO will be contributing CZK 1 million. The KOVO MB Trade Union is also supporting this collection with CZK 1 million.

● The latest contribution is an employee collection organised in collaboration with the KOVO Trade Union. The company’s management doubled this amount to a total of CZK 3.6 million. In response to the critical situation in Ukraine, the carmaker has already released more than CZK 20 million.

● We are keeping our employees informed about material or financial collections organised by our partner towns. More information can be found here:

- Fundraising in Mladá Boleslav
- Material collection in Mladá Boleslav
- Material collection in Rychnov nad Kněžnou

Accommodation

We appreciate the fact that our partner towns of Mladá Boleslav, Rychnov nad Kněžnou and Vrchlabí have taken the necessary preparations to receive Ukrainian refugees. To cover their additional costs, ŠKODA AUTO will be donating CZK 1 million to Mladá Boleslav and half a million to Rychnov nad Kněžnou and Vrchlabí.

● The carmaker is also offering long-term accommodation to our employees’ families in the regions where it operates, for example, at the ŠKODA AUTO Hotýlek accommodation facility.

● The refugees are also being offered accommodation at the recreational facilities owned by the KOVO MB Trade Union or places at children’s camps for refugee children. At the same time, there are activities to support local municipalities in Rychnov nad Kněžnou and Vrchlabí in collaboration with the KOVO KV Trade Union and KOVO VR Trade Union.

● We are offering support with visa applications, accommodation, language courses, health care, integration and education. In addition to the activities already mentioned, we have opened a contact line for our employees.

Material aid

● ŠKODA Logistics is involved in transporting donated items and will be providing vehicles to support Czech humanitarian organisations in their work.

● We are also helping directly in Ukraine in Solomonov, where we assisted in building a refugee centre. With the help of ŠKODA Logistics, we have already transported twelve trucks of humanitarian aid to Ukraine.

● An example of an immediate response to the needs of refugee families is the support for the learning centre in Mladá Boleslav. From conception to implementation in just three days, the learning centre has been available since the beginning of March to help children and adults with integration and language courses. The interest in the learning centre has been such, that within two weeks, the capacity has grown to 600 children and adults who already have access to 23 classrooms across the town. ŠKODA AUTO has contributed financially to establishing and running the centre and expects to continue to do so.

5. Volkswagen Group

What does Volkswagen say about the current developments in the Ukraine crisis?
The Volkswagen Group is greatly concerned and dismayed at the news of the war in Ukraine. We hope for a cessation of hostilities and a return to diplomacy, because we are convinced that there can only be a lasting solution to the conflict on the basis of international law.

In view of Russia’s attack on Ukraine, Volkswagen’s Group Board of Management decided at the beginning of March to stop producing vehicles in Russia until further notice. This decision was taken for the Russian production sites at Kaluga and Nizhny Novgorod.

The export of vehicles to Russia was likewise halted at that time.

Volkswagen has taken the decision to largely suspend business activities in Russia as a consequence of the current overall situation and the great uncertainty and upheavals it means. We are keeping a close eye on further developments as part of the task forces we have set up for that purpose.

What impact does Volkswagen believe a lengthy conflict will have on the European economy?
The Volkswagen Group fears that the conflict between Ukraine and Russia will have a serious impact on the whole European economy.

A further, longer-term interruption to global supply chains will result in, among other things, considerable price increases, an energy shortage and an increase in inflation and thus have massive negative effects for European and in particular German companies.

Europe is dependent on imports of raw materials and so there might be long-term bottlenecks that would additionally hit the European economy. Sanctions and counter-sanctions will hit Russia and Europe; the USA and China will be largely unscathed. That is why the Volkswagen Group advocates a united, strong stance by the international community.
Volkswagen is now fully implementing the sanctions that have been imposed. The objective must be to achieve an end to the armed conflict in Ukraine, and in particular stop the suffering of the people in Ukraine, as soon as possible by means of negotiations between the parties on an equal footing.

What is your response to the Russian government’s threat to nationalize the Volkswagen Group’s plants and assets in Russia and put them under external administration?
The Volkswagen Group is following the discussions about expropriations with concern. Volkswagen is suspending the production of vehicles at the Kaluga plant and export of them to Russia until further notice. The reasons for that include the sanctions imposed by the EU, a lack of or severely limited availability of parts from suppliers and logistical challenges as a result of the hostilities.

Please refer to question 8 about the situation regarding contract manufacturing at Nizhny Novgorod.

Our employees at the Kaluga plant remain employed by us, and they will continue to be paid a reasonable portion of their wages as required by law in Russia while our business is suspended. The costs of that will be borne fully by VOLKSWAGEN Group Rus (VGR).

We will also continue to supply spare parts as far as EU sanctions permit and fulfill our service, warranty and payment obligations.

What consequences will the loss of suppliers have for the production of vehicles?
The Volkswagen Group has a global network of more than 40,000 suppliers, including some in Western Ukraine. In particular, we obtain wiring harnesses for vehicles’ electrical systems from suppliers in Ukraine.

The war in Ukraine resulted in temporary plant closures at suppliers and consequently also at the Group’s European production sites, and also caused problems in the logistics chain due to a loss of haulage capacities and long waits at border crossings.

As soon as the war broke out, the Group Board of Management established a crisis team. Alternative production was quickly established so as to ensure that the components in question are supplied, production losses are reduced and the production of wiring harnesses is duplicated at other locations outside Ukraine together with the suppliers.

The Volkswagen Group stands by its suppliers in Ukraine and, as befits a partner, is doing all it can to help the local companies. Production is now almost back to normal levels in Western Ukraine.

The war in Ukraine, the continuing difficult supply situation for semiconductors and the lockdowns in China with their resultant production losses and supply chain problems are causing overlapping effects in procuring parts from suppliers.

What is the personnel situation like at your Russian plant?
In all activities on site, the safety and well-being of our employees has top priority. The degree to which our business activities are impacted in the affected countries is continuously ascertained in a crisis team.

The Group Board of Management takes its responsibility towards the affected employees at Volkswagen Group RUS very seriously. The affected employees at the Kaluga plant (a total of approximately 4,000) will continue to be paid a reasonable portion of their wages as required by law in Russia and the costs of that will be borne by Volkswagen.

At GAZ in Nizhny Novgorod, Volkswagen Group Rus is beginning to offer a balanced benefits package to the approximately 220 employees working directly for VOLKSWAGEN Group Rus who wish to leave the company voluntarily. It includes financial compensation and health insurance until the end of 2022, as well as the provision of personal IT equipment where applicable.

We will continue to analyze the situation and announce next steps accordingly; no further decisions have been made.

What parts of the company belong to Volkswagen Group Rus? What does it import and produce?
VOLKSWAGEN Group Rus LLC is home to the Russian activities of seven brands in the Volkswagen Group: Volkswagen Passenger Cars, Volkswagen Commercial Vehicles, ŠKODA, Audi, Lamborghini, Bentley and Ducati.

The Volkswagen Group sold around 199,000 vehicles in the Russian market in 2021. Around 170,000 vehicles were made at the company’s production sites in 2021: 118,000 units at the Kaluga plant and 52,000 at the Nizhny Novgorod plant (contract manufacturing on behalf of VW Group Rus). The total market share in 2021 was 11.9%. 11,500 vehicles were exported to CIS countries.

What impact will the changes on the gas market have on Volkswagen’s plans?
The announcement of a gas shortage initially means that the Federal Network Agency becomes the “federal load distributor” and that a crisis team at the Federal Ministry for Economic Affairs is tasked with coordinating, instigating and monitoring any further steps and measures.

In the event of an embargo, the Gas SoS Regulation provides for maintaining supplies to protected customers. That also includes, in particular, district heating for households. Supplies from non-Russian sources will be ensured in the event of an embargo.

We are in regular dialog with the relevant departments at the competent authorities, network operators and suppliers so as to be able to assess further developments promptly and derive any necessary measures.

The supply of gas to the plants of Volkswagen AG and the brands in Germany is currently secured. Volkswagen obtains natural gas from the German grid, which is able to cater for current needs in Germany. Accordingly, the supply of natural gas to the plants, power plants and boiler houses is ensured until further notice. It is up to the suppliers to choose the sources from which they procure their natural gas.

We will leverage the switch to new means of energy generation envisaged at the Wolfsburg site to respond flexibly to the possible scenarios. If there is a continued reliable supply of natural gas, heat and power generation will be secured as planned by modern gas turbines. If the necessary gas cannot be supplied without restriction, the site also has the option of continuing to use hard coal as a source of energy and, in a transitional period, to deploy the existing plants to meet the electricity and heat requirements for the plant in Wolfsburg and to supply heat to around 50,000 private households in the city.

Hard coal for the power plants at the Wolfsburg site is always supplied under long-term contracts. For example, the most recent deliveries of hard coal from Russian suppliers were agreed back in 2021. As a result of Russia’s attack on Ukraine and the sanctions that came into force in April, Volkswagen immediately sought alternative suppliers and has already engaged them in the meantime. By the end of the transitional periods defined by the sanctions (August 2022) at the latest, new suppliers from the U.S., Central America and South Africa, among others, will secure the hard coal requirements of the Wolfsburg site. It goes without saying that Volkswagen complies with all sanctions and implements them in full.

We will continue to pursue the Volkswagen Group’s targets for reducing CO2 and decarbonization in relation to our own internal energy generation and do not see at present any long-term risk to achievement of the sustainability objectives we have set ourselves.

Has contract manufacturing at Nizhny Novgorod been discontinued?
The Volkswagen Group RUS began working with the contract manufacturer GAZ in Nizhny Novgorod in 2011. The U.S. imposed sanctions on Oleg Deripaska, the owner of GAZ, and his companies in April 2018. Since then, operation of the GAZ automobile plant requires a General License issued by the responsible U.S. agency OFAC. The last General License (GL 15L) allowed Volkswagen Group Rus to shut down operations in Nizhny Novgorod until May 25, 2022, after contract manufacturing of VOLKSWAGEN Group Rus models in Nizhny Novgorod had already been discontinued on March 3, 2022, against the backdrop of the general political and economic situation and the associated effects. Due to the high degree of uncertainty as regards the overall situation, we are currently unable to forecast when production in Nizhny Novgorod might be resumed.

The ŠKODA OCTAVIA, ŠKODA KODIAQ, ŠKODA KAROQ and Volkswagen Taos were made in Nizhny Novgorod. VOLKSWAGEN Group Rus continues to supply the dealers of these vehicles produced there with spare parts and fulfills its maintenance and warranty obligations. Due to the difficult situation and its consequences, such as the disruption of supply chains and restrictions on imports to Russia under the EU’s sanctions, the availability of some spare parts may be limited and there may be longer waiting times for warranty repairs.

Cars produced in the Volkswagen Group’s Russian plants were also exported to the CIS countries (Belarus, Azerbaijan, Kazakhstan, Armenia, Tajikistan and Uzbekistan). We are currently working on a new strategy for supplying these markets. Please understand that we are not able to provide further information on this subject at the moment.

Will production in Kaluga be resumed?
VOLKSWAGEN Group Rus has discontinued production in Russia until further notice. We are keeping a close eye on current developments. Due to the high level of uncertainty entailed by the overall situation, we are currently unable to predict when production in Russia will be able to resume.

Additional info

Tags

Media Box

1 PDF
Show more Show less

Related Press Releases Based on tags: 2022, board members, Corporate Social Responsibility, Europe, Mladá Boleslav, Russia, Ukraine, Volkswagen Group

All