Toyota to terminate production in Russia

The Yomiuri Shimbun

15:52 JST, September 24, 2022

Toyota Motor Corp. has announced plans to terminate production at its St. Petersburg plant and suspend sales in Russia.

Seven months into Russia’s invasion of Ukraine, the automotive giant has decided there is no prospect of resuming operations in the country.

Toyota plans to begin the process of selling buildings and land instead of transferring operations to other entities, the company announced Friday.

Toyota suspended operations at the plant in March because it was unable to procure parts due to disruptions in the supply chain but it has “ensured the facility was ready to restart production if the circumstances allowed.”

The automaker has retained its workforce and continued to pay salaries, but now plans to start organizing severance pay and offering assistance for re-employment while the local subsidiary has sufficient funds.

“Even if were to continue, we wouldn’t be able to produce vehicles as Toyota,” the automaker’s operating officer Jun Nagata said in an online interview. “Regarding financial support for our employees, this was the right time to [halt operations]. It was a really hard decision.”

Toyota has operations around the world, including in Europe and North America. With global condemnation of Russia growing, it is possible the company took its corporate image into consideration when making the decision to halt production.

Toyota is the first Japanese auto giant to announce such plans. Nissan Motor Co., Mazda Motor Corp. and Mitsubishi Motors Corp. will likely also face decisions on whether to continue operations in the country.

Toyota will withdraw from production and sales, but will provide repair and other services to Toyota and Lexus vehicle owners if parts can be procured in Russia.

Its operations in Moscow will be reduced and restructured.

Toyota began production of the Camry model in Russia in 2007. In 2021, the company was producing about 80,000 units, less than 1% of Toyota’s global production.