BMW sales, production in Russia put on ice

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BMW Group has put the brakes on all sales and manufacturing in Russia. 

“BMW takes the position to stop now the shipping of products to Russia,” Robert Engelhorn, CEO and president of Plant Spartanburg, told SC Biz News on March 2, a day after the decision. “Russia, we assume had a total roughly of 50,000 vehicles sold last year.” 

The company also has some suppliers in Ukraine, he said. According to industry publication Automotive News, the nation supplies wire harnesses used in BMW electrical systems, as well as 70% of the neon used in the global production of computer chips. Eleven companies in the nation manufacture wire harnesses, followed producers of electronics, seats and plastic products, according to Ukraine Invest. 

The chip shortages have not slowed BMW production, he said. 

“We can say at least for last year, we did not lose one single car,” he said about the ongoing semiconductor shortage, which was highlighted at last week’s 2022 S.C. Automotive Summit in Greenville. “For sure, we will see further shortages throughout this year, and for sure, be affected by the worldwide crisis situation. We have to work closely with our suppliers to resolve these topics and see how we can improve the overall situation in the next months and in the years to come.”

The company has also approved a $1 million donation to support rescue efforts in Ukraine in partnership with UNICEF, according to company spokesperson Nathalie Bauters.

In 2020, Russia was Plant Spartanburg’s fifth largest export market, but Great Britain rose to fifth place last year, while Russian manufacturer Avtotor ramped up to produce the most popular BMW models in the Russian market: BMW X6, BMW X7, BMW 5 Series and the BMW X5. All X models historically have been made in Spartanburg, although the company announced plans to make the X5 in China starting this year. 

On Feb. 10, Avtotor announced the equivalent of a $305 million investment from BMW into a Kaliningrad plant for the production and supply of vehicles until 2028. At least for now, production at the plant has halted. 

“This is, at the moment, put on ice,” Engelhorn said.

Editor's note: This story was updated March 7 at 5 p.m.