Volvo Cars has said it will halt sales of its vehicles in Russia, according to a report in the New York Times. The Swedish carmaker explained that complying with sanctions put in place by the US and the EU makes complicates sales. It’s just too risky for the long-respected car company to continue to do business with Russia, since that country invaded Ukraine.
While we think of Volvo as fully Swedish, the company is actually owned by Zhejiang Geely Holding of China. That makes the decision to stop selling cars in Russia much more interesting. Chinese President Xi Jinping is among the few nations opposing the sanctions and continues to maintain close economic and political ties with Russia and Russian President Vladimir Putin.
Volvo Steers Clear of Russian Sales
Volvo’s cessation of sales in Russia, may stand as an example of how businesses may abandon the Russian market, in response to Putin’s invasion of Ukraine. Not that trade with the Russian market is significant enough to make much of a difference to Volvo or to any other business. The Russian economy is smaller than that of New York State. A number of businesses may very well decide to steer clear of trade with Russia, at least for now. It’s just too risky, and getting riskier every day.
Volvo Cars, as separate from Volvo Trucks, sold just 9,300 vehicles in Russia in 2021. That number represents just 1 percent of Volvo auto sales, worldwide. “Considering the potential risks associated with trading material with Russia,” said Volvo on Monday, “including the sanctions imposed by the E.U. and U.S., Volvo Cars will not deliver any cars to the Russian market until further notice.”
Volvo Cars Even More Attractive Now
Volvo has always been known as a safe, well-made car, that’s practically indestructible. Its cessation of sales in Russia may make Volvo vehicles even more attractive to potential buyers. Not to mention the message the carmaker has sent to Putin, in not so many words: “Your invasion of Ukraine is despicable. And we won’t be selling our cars in your country.”
We think that message has rather a nice ring to it.