Toyota Motor Corp. said Friday it has decided to exit from auto production in Russia, saying it sees no prospect of resuming already suspended output as supplies of key materials remain disrupted seven months into Moscow's war against Ukraine.
Toyota, which halted operations at its plant in St. Petersburg in March due to supply chain issues, is the first major Japanese automaker to announce its withdrawal from vehicle manufacturing in Russia.
Nissan Motor Co., another Japanese automaker, recently decided to extend its suspension of its plant in St. Petersburg for three months until late December. The plant had been set to resume by the end of September.
Toyota said in a statement that it has been unable to resume normal activities even after half a year and sees "no indication that we can restart in the future."
Its operations in Moscow will be restructured to continue to provide maintenance services to existing customers of its Toyota and Lexus brand vehicles, the automaker said.
Chief Communication Officer Jun Nagata said that Toyota will not sell or transfer its Russian business operations to other entities.
Toyota employs around 2,350 people in Russia including at its sole factory, located in St. Petersburg, which began production in 2007 and manufactures the RAV4 sport utility vehicle and the Camry sedan. In 2021, it produced about 80,000 units.
Nagata told reporters online that the company chose to close the factory now to ensure it can offer assistance to its employees.
Toyota said in the statement that it will support its employees for "re-employment, re-skilling and well-being, including financial support."
Russia's Industry and Trade Ministry said Toyota will fulfill its social obligations to employees and make compensatory payments, according to Russia's Tass news agency.
St. Petersburg Governor Alexander Beglov hailed Toyota's "unprecedented measures" to provide support to its Russian workers, according to Tass.
The ministry is working with the city of St. Petersburg on how to utilize the production site after Toyota leaves, Tass said.