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Nissan suspends Russia car orders

TOKYO, December 20, 2014

Japan's Nissan Motor and French partner Renault have stopped taking orders for some cars in Russia and could raise prices on others if the rouble's plunge continues, alliance chief executive Carlos Ghosn said yesterday.

'We have suspended taking orders,' Ghosn told reporters at Nissan's headquarters in Yokohama, saying the freeze is limited to specific models while orders already placed are being honoured.

The Russian currency has tumbled about 50 per cent against the dollar so far this year, putting pressure on carmakers, who have had to raise prices and contend with falling demand.

Nissan has already increased prices on half of models sold in Russia by five to eight per cent. Ghosn said Nissan had increased prices on models that use higher levels of imported parts.

Russia is Nissan's fifth-largest market and the Japanese firm's alliance with Renault, of which Ghosn is chairman and CEO, gives it a majority stake in Avtovaz OAO, Russia's largest carmaker.

Ghosn, who said Nissan and Renault were gaining market share in Russia, wants to grow their combined market share there to 40 per cent from about 35 per cent now. 'The Russian market will stabilise,' he hoped.

Nissan this month announced plans to double production capacity at its St Petersburg plant to 100,000 vehicles.

'The bad news is that the market is shrinking. This is bad news for everyone,' Ghosn said. 'When the rouble sinks, it's a bloodbath for everybody. It's red ink, people are losing money, all car manufacturers are losing money.'

The carmaker aims to raise production in Russia to 90 per cent of Nissan cars sold in the country by 2016, up from seven from 70 per cent now.

Ghosn also praised Japanese Prime Minister Shinzo Abe's mix of economic and fiscal policies at the briefing.-Reuters




Tags: Russia | nissan | suspend |

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