Source: Reuters
Michelin plans to hand over its Russian activities to a new entity under local management by the end of the year and rival Nokian Tyres said it would quit the country, the first Western tire makers to give up doing business in Russia. The French company, whose Western rivals in Russia include Italy's Pirelli (PIRC.MI) and Germany's Continental AG (CONG.DE), said it had become impossible to resume output owing to supply chain problems related to the sanctions against Moscow. Foreign companies seeking to exit Russia over the war in Ukraine also face the prospect of a new law being passed in the coming weeks to allow Moscow to seize assets and impose criminal penalties. That has encouraged some businesses to accelerate their departure.
Until Russia invaded Ukraine, nearly 30% of Michelin's carbon black – used to strengthen rubber in tyres – was sourced from Eastern Europe.
In May, Renault (RENA.PA) said it was to sell its majority stake in Russia-based carmaker Avtovaz (AVAZI_p.MM) to a Russian science institute reportedly for just one rouble with a six-year option to buy it back, leaving the door open for the French carmaker's return. German car parts supplier Continental in April said it had temporarily resumed tyre production for passenger cars at its Russian plant in Kaluga to protect local workers who could otherwise face criminal charges. Italy's Pirelli has halted investment in Russia and has progressively limited activities at its plants there. About 10% of its global tyre output is produced at two Russian factories.
