Toyota ends vehicle manufacturing in Russia with no plans to restart

Affected employees will be offered assistance for re-employment, reskilling and well-being, including financial support

The Toyota car factory in St Petersburg, Russia. The Japanese company said that after six months, circumstances have not allowed it to continue its operations there during Russia's conflict with Ukraine. EPA
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Japan's Toyota Motor, the world's biggest carmaker, said it is permanently ending vehicle manufacturing at its St Petersburg plant in Russia, with no clear indications of restarting operations there.

The company had suspended Russian operations on March 4, shortly after Moscow began its military offensive in Ukraine, which disrupted the company's supply chain.

Since then, it had been monitoring the situation and evaluated the future sustainability of its business in Russia, and has retained its full workforce and was ready to restart operations “if the circumstances allowed”, Toyota said on its website on Friday.

But after six months of assessing the situation, “we have not been able to resume normal activities and see no indication that we can restart in the future,” it said.

Russia began its military offensive in Ukraine in late February, which the international community has decried and has been met by sweeping sanctions led by the West.

A list of global companies have either halted operations or completely left Russia in protest of Moscow's actions, including heavyweights from the financial, energy, retail and food and beverage sectors.

More than 1,000 companies have at least curtailed their operations in Russia, according to the Yale School of Management.

Among them are Citi, Goldman Sachs, BP, Shell, Equinor, Apple, Google, Microsoft, Samsung and TikTok. Starbucks and McDonald's, two of the biggest brands in the food industry, were promptly replaced by new brands.

Even grand slam tennis organiser Wimbledon has banned Russian players from participating in its tournament.

Carmakers that have made similar decisions include Volvo, BMW, Jaguar, Land Rover, Mercedes-Benz and Mazda.

Toyota said its decision was also meant to uphold its “values and principles”.

“The decision to terminate production of Toyota vehicles in Russia is not one that we have taken lightly. Over the last 80 years, we have developed our business and our brand with the support of stakeholders around the world,” the company said.

“We must now act in a way that allows us to protect the values and principles that our predecessors built up and be confident that we can pass them on to the next generation.”

Toyota also said that it will continue supporting employees who have been affected by the closure of its St Petersburg plant, although the company did not explicitly say that it was firing them.

“We would like to thank our employees for their hard work and loyalty. In recognition of their valued contribution, we will be offering them assistance for re-employment, reskilling and well-being, including financial support above legal requirements,” it said.

Updated: September 24, 2022, 10:00 AM