GM Halts Sales to Russian Dealers as Ruble Plummets

DETROIT (Detroit Free Press/TNS) -

General Motors has temporarily halted sales of vehicles to its Russian dealers in the wake of the ruble’s decline and much higher interest rates.

“This is a temporary measure because of the volatility of the ruble,” said Johan Willems, Vice President for GM’s Opel Group, in an email Thursday. “I cannot give you any prediction on how long this stop will be.”

GM will deliver Chevrolet, Opel and Cadillac cars that have already been purchased at the agreed-upon price.

Automakers must translate sales in overseas markets back to the currency of their headquarters country. As the ruble has lost 40 percent of its value since June, sales in Russia equal fewer dollars.

“There is little point in manufacturing and importing vehicles that are going to lose money simply because the ruble’s ongoing slide is so dramatic,” said Tim Urquhardt, an analyst focused on the Russian economy for IHS Automotive.

Bloomberg reported Thursday that Audi and Jaguar Land Rover also stopped selling vehicles in Russia this week.

BMW has said it may see its fourth-quarter earnings fall by between 100 million and 150 million euros ($123 million to $184 million) if the ruble loses half its value. Daimler, Volkswagen, Renault and Hyundai probably face an even larger impact, analyst Arndt Ellinghorst, an analyst with Evercore ISI, told Bloomberg.