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Russia exit costs European automaker nearly $700m — RT Business News

Skoda is now in the final stages of talks on an asset sale, the company’s CEO has said

Czech carmaker Skoda Auto, a subsidiary of German Volkswagen, is reaching an agreement to sell its assets and exit Russia, company CEO Klaus Zellmer announced this week.

Skoda has lost nearly 700 million euros ($742 ​​million) leaving its second market due to supply chain disruptions caused by Western sanctions. Exports of cars and spare parts to Russia have also been halted.

“Volkswagen Group has analyzed various scenarios for the future of our business options in Russia,” Zellmer told reporters, adding that “the preferred option is to sell the assets of Volkswagen Group Russia…to a third party.”

He declined to give details of the deal until they were agreed by all parties, but noted the sale talks were “in the final stages”.

German company fined for violating Russian sanctions – media

The automaker, which produced around 780,000 cars globally in 2022, suspended production at its two Russian plants in Kaluga and Nizhny Novgorod shortly after the EU imposed Ukraine-related sanctions . The Kaluga plant has a production capacity of 225,000 vehicles per year and has assembled the Volkswagen Tiguan, Volkswagen Polo and Skoda Rapid.

Last year Skoda’s production in Russia fell to 18,300 cars from the 90,400 delivered in 2021, according to official data.

The automaker’s net profit fell 11.7% to 489 million euros in 2022, hit by a sharp rise in raw material prices and global supply chain disruptions.

For more stories on economics and finance, visit RT’s business section

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