Toyota and Honda join growing corporate retreat from Russia

Following the likes of Ford and Exxon Mobil, which are choosing not to do business there after invasion of Ukraine.
Image: Andrey Rudakov/Bloomberg

Japan’s biggest carmakers threw their heft behind the global corporate pullback from Russia, following the likes of Ford Motor Co. and Exxon Mobil Corp., which are choosing not to do business there after invasion of Ukraine.

Toyota Motor Corp. said it is halting production at its plant in St. Petersburg from Friday, and will halt vehicle shipments to Russia. Honda Motor Co. will stop exports of cars and motorcycles to the nation, while Mazda Motor Corp. is suspending shipments of parts to a plant in Russia, the Nikkei reported.

Shares of all three rose Thursday in Tokyo, with Mazda up 4.9% and Toyota and Honda adding at least 0.8%.

“Toyota is watching the ongoing developments in Ukraine with great concern for the safety of people of Ukraine and hopes for a safe return to peace as soon as possible,” the company said in a statement. “We are also monitoring global developments and will make necessary decisions as required.”

The actions by Japan’s top automakers add more weight to what is shaping up as an international boycott of the world’s No. 11 economy, though companies in other key sectors, including energy and tech, have largely remained tight-lipped about their stances on future business activity there.

Companies around the world are withdrawing from the Russian market due to concerns over human rights, logistics and the impact of international sanctions. Apple Inc. and Nike Inc. earlier announced plans to halt sales in Russia, and United Airlines Holdings Inc.’s daily flights to India will no longer pass over the country.

Japanese Prime Minister Fumio Kishida has embraced sanctions, following the lead of Group of Seven counterparts amid concern that failure to halt the invasion could embolden China to attack neighbouring Taiwan, though officials in Taipei downplay that possibility. Japan, which relies heavily on the US for security, also has territorial disputes with China and Russia.

Kishida’s government is backing the move to ban some Russian banks from the SWIFT money messaging system and freezing the assets of the country’s central bank, as well as those belonging to officials including President Vladimir Putin.

The rapid response prompted a letter of praise to Kishida from President Joe Biden this week, Ambassador Rahm Emanuel told reporters Wednesday.

“As the president said in his personal letter to the prime minister, he greatly appreciates Prime Minister Kishida’s bold and decisive action,” Emanuel said. “Because of his actions, it is no longer just a European confrontation but is a global confrontation of democracies against autocracies.”

With fuel prices already hurting businesses and households in Japan, the nation’s firms haven’t immediately followed their Western counterparts in exiting joint oil and gas projects with Russia.

Kishida told parliament that while the government was prepared to offer advice on the matter, firms involved with the Sakhalin-II oil and gas project in eastern Russia must make their own policy decisions. Gazprom PJSC, a majority state-owned corporation, has a 50% stake in that project.

Toyota, which makes the RAV4 and Camry models at its Russian factory for the local market, said production and shipment halts will continue until further notice, citing supply-chain disruptions.

Honda pointed to challenges around distribution and finances, saying it will resume shipments once the situation returns to normal. Honda doesn’t have a factory in Russia, but it exports about 1,500 SUVs annually to the country from plants in the US, according to NHK.

Sony Corp. shut its sales offices in Ukraine and halted sales of electronics, a company spokeswoman said, and it will continue to operate via online channels and a third party in Russia. The company will take appropriate action as the situation develops, she added.

© 2022 Bloomberg


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