GM, Audi suspend Russia sales on ruble collapse

General Motors, Audi and Jaguar Land Rover temporarily stopped selling cars in Russia this week, deciding that taking a timeout from the market was the best way to deal with the ruble's collapse.

Automakers are battling a more than 40% drop in the value of the ruble since June in Russia's biggest financial crisis since 1998. In recent weeks, Russian customers has been snapping up Porsches and other cars to convert their savings into something tangible. But that temporary boon for the industry soon turned to a liability as the ruble's drop ate into what the manufacturers got for their vehicles.

GM suspended sales to dealers on Dec. 16 to "manage its business risk" in light of the volatility of the ruble, the carmaker's Russian unit said by e-mail.

GM, which didn't set a date to resume wholesale deliveries, will deliver Chevrolet, Opel and Cadillac cars that have already been purchased at the agreed-on price.

Audi also halted sales in Russia on Dec. 16. The Volkswagen premium unit will restart after it sets a new price list in the near future, said Aleksey Kozhukhov, a spokesman for Audi's Russian operations. Audi, the No. 2 luxury-car brand globally, is also halting production at a plant in Kaluga from Dec. 22 to Jan. 12 for a regular holiday break.

The ruble's abrupt drop is "causing major pain," Arndt Ellinghorst, an analyst with Evercore ISI, said in a note. Jaguar Land Rover said it had halted sales until Friday because of the current economic situation.

BMW, one of the few carmakers that discloses its ruble exposure, may lose 100 million euros ($123 million) to 150 million euros in earnings in the fourth quarter if the ruble loses half its value, Ellinghorst estimated. Daimler, Volkswagen, Renault and Hyundai probably face an even larger impact, the analyst said.

To reduce its Russia-related risks, BMW began reallocating cars to more attractive markets in early summer, said Nikolai Glies, a spokesman for the Munich-based company.

The world's largest maker of luxury vehicles sold 33,465 BMW and Mini cars in Russia through November, a 17% decrease from last year. Industrywide, auto sales have fallen 12% in the first 11 months of 2014.

Toyota will raise prices to adjust to the market conditions and is determining when and by how much, spokesman Jean-Yves Jault said in an e-mail. While there are no plans to suspend sales at the moment, completing orders could be affected by the pending price increases.

Volkswagen said it's still selling cars in Russia but is watching the market with concern.