Both Michelin and Nokian Tyres have respectively announced that they will pull all manufacturing and operating activities out of Russia, due to the country’s invasion of Ukraine.
After suspending its manufacturing activities in Russia on 15th March, Michelin this week said that it is now “technically impossible” to resume production in the country, due in particular to supply issues, “amid a context of general uncertainty”.
The French tyre maker added that it plans to transfer “all of its Russian operations by the end of 2022”, and is also considering the possibility of transferring control of its administrative, sales and industrial operations to the current local management.
It said that it is preparing “the most favourable framework possible” for its employees. The new entity would operate through an independent structure from Michelin, the company said.
Michelin Russia employs approximately 1,000 people, including 750 at the Davydovo plant, located about 100km from Moscow. The site has an annual production capacity of 1.5 to two million tyres, mainly for passenger cars.
Michelin said its sales in the country represent two per cent of the group’s total sales and one per cent of its global car tyre production.
Meanwhile, Nokian Tyres said in a statement that it has decided to initiate a “controlled exit” from the Russian market, effective immediately.
The Finnish tyre manufacturer has been operating in Russia since 2005, but said that due to Russia’s invasion of Ukraine, and the subsequent, tightening sanctions, it is “no longer feasible nor sustainable” for it to continue operations in the country.
To secure supply of its products, Nokian Tyres has continued to increase capacity at its factories in Finland and in the US, and has decided to invest in completely new capacity in Europe.
The company announced earlier in the year that it had stopped investments into the Russian facility and started transferring production of selected key product families from Russia to its other factories.
Nokian Tyres also said this week that Andrey Pantyukhov, who has been heading Nokian Tyres’ business area in Russia and Asia, is no longer a member of its management team. No specific reason was given for this.