How the War in Ukraine Is Restructuring the European Car Market

Learn how the European car market and supply chain is coping with disruptions caused by the War in Ukraine.
Written by Jason Crosby
Reviewed by Kathleen Flear
Updated on Aug 05, 2022
war in Ukraine
has been in headlines across the world for months, with signs of a cease-fire looking unlikely. Along with the tragedy and frustration of this event that’s affecting nearly the entire world, the automotive industry in
has been damaged by the fighting. Although carmakers, suppliers, and consumers are doing their best to adapt, it’s worth taking a closer look at the effects of the war in Ukraine on the European car market.
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The effects of the Ukraine War on the European car market 

The most obvious effect the war in Ukraine has had on the automotive sector has been the way the conflict has prevented supplies and automotive components from being able to be shipped through or into Ukraine and Russia. The war in Ukraine has obvious political implications, and, according to the
American Journal of Transportation
, many carmakers have pulled their products from Russia in a sign of solidarity with Ukraine. 
Of the carmakers known for selling vehicles in Russia, Toyota is the most prominent. Toyota, along with Mazda, Honda,
, Stellantis,
, and others have all stopped shipping their vehicles into Russia. 

The war in Ukraine complicates employee-employer relationships

Renault in particular has been in a tough spot. The company has 45,000 employees based in Russia, and the company has been clear that it does not support Russia taking military action against the people of Ukraine. 
In April of 2022, Renault sold its Russian facility to a non-automotive manufacturer, Nami. Renault has the option to buy back their company within the next five to six years, depending on the outcome of the conflict and if Renault is interested in operating once more in Russia.  

The War’s effect on the European supply chain

When a war breaks out, manufacturers aren’t exactly given a timeline for when it will start, or when it will be finished. So, when the Ukraine War began, freight ships and trucks had vehicles that were destined for Russia or Ukraine, but couldn’t make it to either country. 
As a result, carmakers and manufacturers had to find new destinations for their vehicles, as well as new locations for those vehicles to be sold. The shipping pileup has left thousands of
vehicles stuck in shipping yards
or harbors, creating a logistical nightmare for European car companies and dealerships. 

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