Volkswagen, Toyota halt Russia business protesting attack on Ukraine

German car giant Volkswagen said on Thursday it would stop its vehicle production in Russia "until further notice" and "immediately" halt exports to the country in light of its attack on Ukraine, reported dpa.

VW operates its own car production sites in Kaluga, south-west of Moscow, and Nizhny Novgorod, further east. The company announced that production at both sites would be stopped for the time being.

No cars from among the VW Group brands - including Audi, Porsche and Škoda - would be exported to Russia, the firm said in a statement.

On Wednesday luxury carmaker Mercedes-Benz also said it was halting business with Russia.

Selling to or buying from Russian companies has become far harder in the days since the Kremlin launched its invasion due to sanctions imposed by the international community.

Leading German business association DIHK said on Thursday that the sanctions effectively amounted to a "full embargo."

Even before the war dramatically escalated in Ukraine, supply problems and bottlenecks were slowing business down, said Volker Treier, the head of foreign business at DIHK.

German carmakers have been particularly hard hit, and the conflict has affected, for example, the provision of wiring harnesses from Ukraine that relay information and electric power around a vehicle.

Several car manufacturers have announced temporary halts in production at some of their German sites in the past two days.

Toyota on Thursday said it would suspend production at its St Petersburg plant from Friday "due to supply chain disruptions." The plant manufactures RAV4 and Camry models, mainly for the Russian market.

The carmaker said it had already stopped all activities in Ukraine as of February 24.

It is not only carmakers that have been affected by the conflict, however. Swedish furniture giant IKEA has also suspended its operations in Russia and Belarus until further notice. The decision affects 15,000 IKEA employees.

"The war has had a huge human impact already. It is also resulting in serious disruptions to supply chain and trading conditions. For all of these reasons, the company groups have decided to temporarily pause IKEA operations in Russia," IKEA said.

The move means that all IKEA exports and imports to and from Russia and Belarus will be paused. The same applies to production in Russia. IKEA furniture shops in Russia and Belarus will also be closed.

International sanctions prompted a number of key global companies to announce that they were winding down or reducing business with Russia, including Boeing, Apple, ExxonMobil and shipping company Maersk.

Music and podcast streamer Spotify said it was closing its offices in Russia but would continue to make its services available in Russia "to allow for the global flow of information."