Manufacturers are leaving Russia

In light of recent global events, we hear every day about companies leaving the Russian market, ranging from food manufacturers to automotive corporations. Should we expect a shortage of tires and which tire manufacturers remain in the market?

The global automotive tire market has been experiencing a shortage since the beginning of the pandemic. Tire production, like any technically complex product, requires the supply of a large number of ingredients and materials from different countries. Due to disruptions in logistics chains and COVID-19 restrictions, tire factories have produced fewer tires than required by the market as a whole. A similar situation is happening now, with usual supply chains being disrupted, both for finished tires and materials. And those logistics routes that are working, for example, from Asia, have become very expensive. The container freight index is currently steadily at around $10,000, which is about 7 times higher than usual. There is almost no major tire or other factory in the world that could work in complete isolation. And the current situation is leading to the suspension of production in Russia. Russia has factories of almost all premium tire brands. The French company Michelin has been operating the longest in Russia. In late March, the company released a press release in France, announcing the temporary suspension of the Davydovo plant and the cessation of tire imports and exports. Japanese companies Yokohama and Bridgestone, which have factories in Lipetsk and Ulyanovsk, respectively, also announced that they are stopping investments in Russia and temporarily suspending production. The German company Continental, whose plant is located in Kaluga, also announced that sales will be made from the company's current stock. The Italians from Pirelli announced that they will gradually reduce production at several of their plants to the size necessary to pay salaries to employees. Nokian announced on its official website that the plant in Vsevolozhsk continues to operate, but investments will be redirected to plants in Finland and the USA. Russian companies Cordiant and Kama did not report any restrictions, but their size and model range very weakly cover large wheel diameters for expensive cars. And many companies without production in Russia, such as Hankook and Toyo, announced the cessation of supplies to Russia.

Thus, almost all foreign brands will now work with the volume of tires that they managed to import to Russia at the end of 2021 and the beginning of 2022. Therefore, it can be said with certainty that we are facing a shortage, especially in large sizes that are not produced in Russia and did not arrive in Russia in the necessary quantity. If you need to buy summer tires, it's worth taking care of it as early as possible this year. In addition to the increase in price following the exchange rate of foreign currencies, at some point, there may not be any wheels in the right size at all.