Russia may tighten retaliatory sanctions against Western nations to include a ban on imports of cars, among other things, if the United States and the European Union impose additional sanctions on Moscow. Hayley Platt reports.
Western carmakers including GM, Ford, Renault and Fiat have all invested heavily in Russia in recent years. In fact Russia was expected to become Europe's biggest auto market by 2020. But the current sanctions battle over Ukraine could put the brakes on business. According to one Russian newspaper the Kremlin may ban the import of cars if the West implements more sanctions. The paper say imported vehicles accounted for more than a quarter of passenger cars in the first half of 2014. For trucks it was nearer a half And buses around an eighth IG's Alastair McCaig says the move could hurt both sides. SOUNDBITE: Alastair McCaig, Market Analyst, IG, saying (English): "It will be a pretty unpopular decision especially when you consider the alternatives and I think it's perhaps a decision they should not take in too much haste." Manufacturers like Ford, Toyota and Hyundai with factories inside Russia, won't see any disruption to their Russian operations. But Ford has recently cut jobs in Russia in response to a falling market. Earlier this month its European CEO, Stephen Odell, said he was watching developments carefully. SOUNDBITE: Stephen Odell, Ford European CEO, saying (English): "I think most people went in with an automotive view that the industry would be over 3 million this year, it's tracking about 2.5/2.3/2.4. At some point it will regain its growth trajectory so it's an important market for us but I think like most businesses we're assessing what that means." Russia has already imposed a ban on some agricultural imports from Europe, the U.S., Canada and Australia. The newspaper also says - aircraft and shipbuilding - could be another sanctions target.