Mitsubishi Stops Production amid Russian Economic Collapse
Many automakers are pulling out or have already pulled out of the failing Russian auto market and now Mitsubishi is joining their ranks. A joint venture by PSA Peugeot Citroen and Mitsubishi Motors has decided to suspend production temporarily at its Russian factory. The suspension comes after a plunge in sales.
Closing the factory will result in the loss of 100 jobs. PSA Peugeot Citroen will halt production of the Citroen C4 and Peugeot 408 models from the end of April to July 10th. Mitsubishi will stop production of its Outlander and Pajero Sport. The Russian government has agreed to subsidize loans and financing for state bodies in an attempt to support the market.
“Despite the efforts we make, the continuing worsening of the market situation prompts us to make painful decisions,” said PSA Peugeot Citroën.
The Russian economic collapse comes as a result of a weakened ruble. United States and other country’s sanctions over the crisis in Ukraine have hurt the economy. After years of growth reaching over 10% per year, the market dropped in 2014 and it could fall as much as 35% this year. PSA holds 70% of the joint venture while Mitsubishi holds the other 30%.