NOKIAN is to relocate tyre production from Russia to the EU and the USA

NOKIAN is to relocate tyre production from Russia to the EU and the USA


 

RusAutoNews.- As reported at the company press release of Nokian Tyres, the EU sanction announced on April 8 has impacted the company’s business. The sanction prohibits the import of tyres from Russia to the EU, prohibits the export of certain raw materials from the EU to Russia, and limits transportation from and to Russia. The sanctions have a significant impact on company’s ability to manufacture tyres in Russia, and ability to sell tyres both in Russia and in the EU, specifically in Central Europe.

Jukka Moisio, President and CEO of Nokian Tyres, has stated: “Due to high uncertainty and dynamic environment, it is impossible to estimate the ultimate impact on our overall performance at the moment. The sanctions have a significant impact on our ability to manufacture tyres in Russia, and thus our ability to sell tyres in Russia and in Central Europe.

According to the company, in 2021, Russia represented approximately 20% of company’s net sales, and approximately 80% of passenger car tyres were produced in Russia. Of raw materials for tyres produced in Russia, approximately half came from outside of Russia. Raw material availability and its logistics will have a significant impact on the company’s capability to continue production in Russia.

As reported, Nokian Tyres is expediting its plans to invest in new production capacity in Europe, and continues to increase production capacity at its factories in Nokia, Finland and Dayton, US. According to the plan, in the future all tyres sold in the Nordic countries will be produced in Nokia, and all tyres sold in North America will be produced in Dayton and in Nokia.

To secure supply of our products, we immediately activated contingency plans in February, including shipping tyres closer to our customers, securing the raw material supply, and transferring production of selected key product lines from Russia to our other factories. To reduce reliance on Russian production and to diversify our manufacturing footprint, we have continued to increase capacity at our factories in Finland and in the US, and we are expediting our plans to invest in new capacity in Europe,” stated Jukka Moisio.

On the other hand, the heavy tyres business is not impacted by the ban, as all heavy tyres are produced in Finland.

Sales and distribution of heavy tyres to Russia were stopped due to the war. Nokian Tyres has never sold tyres to the Russian army, and the Russian Federation is not a customer,” as stated in the press release.