Russian Automaker LADA Halts Production And Issues Salary Cuts Due To Sanctions

The sanctions following Russia’s invasion of Ukraine are showing their toll in local production with Lada halting operations in the Togliatti and Izhevsk pants on March 5, 9, and 11. A spokesperson of AvtoVAZ said that workers will either receive a partial income or take their leave during the production freeze, while those employed in sectors like customer service will not be affected.

AvtoVAZ’ Togliatti plant built on the banks of the Volga River was self-sufficient in the Soviet Union days but the automaker has become increasingly reliant on outsourcing parts in the past decades. As reported by The Wall Street Journal, over 20 percent of parts needed for production including electronic components are coming from outside the Russian borders, making it impossible to continue operations after the country was cut off from global trade. One of the main suppliers is the Romanian plants of parent company Renault, where Dacia vehicles are being produced.