Russia’s SOK Group has confirmed that production at carmaker IzhAvto could be halted soon, ITAR-TASS reported. Exchange rate problems have compounded difficulties arising from a collapse in the Russian car market.
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IzhAvto is a unit of SOK Group.
The report said that the price of assembly kits that IzhAvto buys from Kia in foreign currency has risen 40% in rouble terms since last autumn.
Despite the higher cost of assembly kits, prices for IzhAvto’s cars have not increased, SOK Group’s Public Relations Director Dmitry Rumyantsev said.
SOK Group has repeatedly asked KIA Motors to lower the price of its assembly kits, but the Korean company has not complied with these requests, Rumyantsev added.
Rumyantsev also attributed the possible closure of the plant to a 40%-60% decrease in demand for cars in Russia, as well as the failure of talks to sell IzhAvto to AvtoVAZ.
