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5 Apr 2022

Conor Humphries,
Lisa Shumaker, Reuters

Russian auto boomtown grinds to halt over Ukraine sanctions

Automobile production

5 April 2022

Thousands of auto workers have been furloughed and food prices are soaring as Western sanctions pummel the small Russian city of Kaluga and its flagship foreign carmakers, with more sanctions likely to come.

The Kaluga region...says it has attracted more than 1.3 trillion roubles ($15 billion) in investment, mostly foreign, since 2006.

But Western sanctions imposed in recent weeks...have exacerbated lingering component shortages and halted production at two flagship car plants, Germany's Volkswagen and Sweden's Volvo.

A third, the PSMA Rus plant that is a joint venture between Stellantis and Mitsubishi and employs 2,000, may halt production soon due to a lack of parts, Stellantis' chief executive said..."It is not clear what will happen. They don't give us any concrete information," said Pavel Terpugov, a welder at the PSMA Rus plant.

Volkswagen, whose factory employs 4,200 people, in early March suspended operations. A spokeswoman said production remained frozen.

Volvo Group, which employs over 600 people to build trucks, also suspended production...