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On September 23, Japanese carmaker Toyota announced on its website that Toyota and Toyota Europe had decided to permanently terminate their car manufacturing operations at their plant in St. Petersburg, Russia, due to the conflict between Russia and Ukraine. This move means that Toyota will stop production in Russia.

Toyota said the decision to stop production in Russia was not easy and that it had been looking for a suitable solution, but the St. Petersburg plant ceased operations on March 4 because it was unable to procure parts. After that, Toyota Russia Co., Ltd. continued to prepare for resumption of work, such as daily maintenance of the production line. However, even after half a year, production could not be resumed, so it had no choice but to announce the termination of production activities in Russia. Toyota said the St. Petersburg plant in Russia would start a production closure process and planned to provide maximum support to local employees, while its Moscow office would be downsized and restructured to maintain the services of Russian Toyota and Lexus owners.

In addition to Toyota, Mazda is considering withdrawing from the Russian market. According to foreign media reports, Mazda said it was considering withdrawing from the Russian market. Mazda said it had become increasingly difficult to operate because of the disruption of the supply chain caused by the war between Russia and Ukraine. Mazda's manufacturing plant in Russia has stopped production, but Mazda has not made a final decision on sales and after-sales issues.

Toyota is the first Japanese carmaker to announce its withdrawal from Russia. Nissan, Mazda and Mitsubishi have also stopped production at their factories in Russia, but only Toyota has announced its withdrawal from Russia. It is worth mentioning that Toyota's market share in Russia is much higher than that of other Japanese brands. According to the data, Toyota's sales in Russia increased by 6.9% to 97941 vehicles in 2021 compared with the same period last year, second only to Lada (350741), Kia (205801), Hyundai (167331) and Renault (131552). Nissan, another Japanese brand in the top 10, sold 51338 vehicles in Russia in 2021.

It is understood that Toyota's St. Petersburg plant in Russia laid the foundation in 2005 and officially put into production in 2007. Russian President Putin also attended the groundbreaking ceremony. The factory mainly produces RAV4 and Camry models. Toyota said in a statement on its website on March 3 that it would suspend production at its St. Petersburg plant in Russia from March 4, while Toyota's car imports in Russia have been halted due to supply chain disruptions.

In addition to Toyota, French carmaker Renault also announced its withdrawal from Russia. On May 16th, French carmaker Renault Group said it had agreed to sell its entire stake in Renault Russia to the Moscow municipal government and its 67.69% stake in AvtoVAZ to NAMI, a Russian government-backed car research and development center. "the agreement gives Renault the option to buy back its stake in AvtoVAZ, which can be exercised at a specific time over the next six years," Renault said.

Unlike Toyota, the Russian market is important to Renault, which is the largest shareholder in AvtoVAZ, Russia's largest carmaker. Data show that Lada Motors is the largest Russian automaker and is a brand of AvtoVAZ. French automaker Renault participated in AvtoVAZ restructuring and became its controlling shareholder in 2004. Renault entered the Russian automobile production of Lada cars and Renault brands. According to the data, Russia sold 1666780 cars in 2021, of which 350741 Lada cars were sold, accounting for 21% of Russia's total car sales. Renault sold 131552 vehicles, accounting for 8% of Russia's total car sales. Russia has become Renault's second largest car market after France. However, the conflict between Russia and Ukraine and the sanctions imposed by Europe and the United States against Russia dealt a heavy blow to Renault's production and operation in the Russian market, and announced on February 28 that it would stop production at its factory in Moscow. On March 23, it was decided to stop all activities at the factory in Moscow indefinitely. The latest figures show that Renault sold only 31638 vehicles in Russia from January to August 2022, a year-on-year drop of 65.2 per cent.

After the conflict between Russia and Ukraine, many car companies, including the United States, Germany, Japan, France and other countries, have announced restrictions on Russian car production and export, which directly led to the avalanche of Russian car sales. at the same time, this has also brought a huge negative impact on the Russian economy. According to data released by the Russian European Enterprise Association, cumulative Russian car sales fell 60.7% year-on-year to 410548 units from January to August in 2022, of which August sales fell 62.4% year-on-year to 41698 vehicles. It fell 74.9% in July, 82% in June, 83.5% in May, 78.5% in April and 62.9% in March.

Under the influence of the conflict between Russia and Ukraine and sanctions from Europe and the United States, the Russian car market has been hit hard, and a number of car companies have no choice but to suspend production. Since February 24, a number of car companies around the world have announced their withdrawal or suspension of operations in Russia. For example, in addition to suspending production at its two Russian factories, Volkswagen will also stop exporting vehicles to Russia, a decision that affects its Volkswagen, Skoda, Audi, Porsche and Bentley brands. In addition, most European brands, including Honda, Volvo, Mercedes-Benz, BMW and Jaguar Land Rover, have announced that they have stopped exporting and selling to Russia. Volvo also announced a moratorium on exports to Russia.

As overseas brands lose competition in Russia, Chinese car brands have significantly increased their share of the Russian car market. The Harvard brand, for example, ranked third in August with sales of 2990 vehicles, up 26 per cent from a year earlier, making it the only brand in the top 10 to grow, with an overall market share of 7.2 per cent, up from 2.1 per cent last year. In addition, while Geely fell 8.1 per cent year-on-year to 1990 vehicles, its market share rose to 4.8 per cent.

On September 24, Russian President Vladimir Putin signed a series of laws related to partial mobilization, including voluntary surrender, desertion and failure to respond to conscription orders, as well as simplifying naturalization procedures for foreigners serving in the Russian army. In the future, with the sanctions imposed by European and American countries on Russia and the escalation of the situation between Russia and Ukraine, it is difficult for the Russian car market to recover in the short term.

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