Michelin leaves Russia: assets sold to local distributor

Michelin leaves Russia: assets sold to local distributor

Michelins let it be known that he has it to be sold his activities in Russia for International Power Tires, a Russian distributor of various tire brands. Inside of communicatethe French company announced “the signing of an agreement with the Power International Tires company, for the purchase of two of its local companies, Michelin Russia Tire Manufacturing Company (MRTMC) Llc and Camso Cis Llc“. Currently, no information on the sale price has been released.

Michelin is leaving Russia

As indicated Reutersthe agreement, approved by the local authorities, will save 250 jobsespecially according to the only Russian plant of Michelin Davydovo. The facility, located near Moscow, previously employed 750 people. It also produces up to 2 million tires per year, mainly for passenger cars for the Russian market and some Northern European markets. Michelin said it is impossible for every employee to be transferred to Power International Tires, and therefore those who want to leave the company will be able to do so”under good conditions”.

The French company has been present in Russia ever since 1997and in 2004 became the first international tire company to open there to be established productive. Last year he announced the suspension of industrial activities in the Russian Federation and exports to the country due to supply problems following the outbreak of war in Ukraine.

Following the announcement, Michelin explained that sales in Russia are contributing 2% of the group’s total and 1% of its global production of car tires. The tire industry has been hit hard by Western sanctions on Russia, which have cut off supplies of key raw materials and closed factories that supply customers outside of Russia. Michelin said in April that the suspension of its operations in Russia has caused a decrease for 25% of the volume in the first quarter of this year.

Decision of the main brand

The international companies they were faced with a dilemma: leave Russia to protest the war, and suffer a severe financial blow, or stay and risk serious damage to their reputation? Some major brands left as soon as Russian forces entered Ukraine, while others tried to resist, only to announce their departure a few months later under public pressure.

As reported by Moscow Timeswhich cited a database of Yale University researchers, more than 1,000 foreign companies have voluntarily reduced their activities in Russia in the past year. Their releases have brought many important changes for Russian consumers.

To name just a few, McDonald’s temporarily closed its restaurants in March and then, two months later, announced its exit from Russia. Japanese carmaker Nissan halted production and imports in Russia in March and announced the transfer of its operations to a local partner several months later. German cosmetics company Wella announced in May that it will stop exporting products to Russia after almost 30 years. And the list could go on and on.