Swedish car manufacturer Volvo has suspended production and sales of its commercial vehicles at its Kaluga plant in Russia due to the conflict in Ukraine, a company spokesman told the German DPA news agency on Monday.
The spokesman said the decision would take effect immediately and be valid until further notice.
The factory, located south of Moscow, employs 700 people. Across Russia, another 600 employees are engaged in sales, maintenance and repair. A Volvo spokesman said sales in Russia and Ukraine together account for 3.5 percent of the group’s total net sales.
Since it opened in 2009, the Kaluga facility has produced 31,727 heavy-duty trucks.
Volvo increased its sales and profits last year despite a general chip shortage, however the global supply of semiconductors and other components continues to be a concern for the automobile group that has led to production downtime.
The company’s decision to suspend production and sales in Ukraine comes at a time when sanctions are being implemented against Russia from countries across Europe and North America, including disconnecting Russia from the SWIFT financial payment system and freezing the Russian Central Bank’s euro and dollar currency reserves.
Volvo is competing in the global market with Traton, a subsidiary of Daimler Truck and Volkswagen, among others.