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Russian auto boomtown grinds to halt over Ukraine sanctions

Thousands of auto workers have been furloughed and food prices are soaring as Western sanctions pummel the small Russian city of Kaluga and its flagship foreign carmakers, with more sanctions likely to come. The Kaluga region, 190 kilometers (120 miles) southwest of Moscow, says it has attracted more than 1.3 trillion roubles ($15 billion) in investment, mostly foreign, since 2006. But Western sanctions imposed in recent weeks after Russia sent tens of thousands of troops into Ukraine have exacerbated lingering component shortages and halted production at two flagship car plants, Germany's Volkswagen and Sweden's Volvo. A third, the PSMA Rus plant that is a joint venture between Stellantis and Mitsubishi and employs 2,000, may halt production soon due to a lack of parts, Stellantis' chief executive said last Thursday. "It is not clear what will happen. They don't give us any concrete information," said Pavel Terpugov, a welder at the PSMA Rus plant. Terpugov said he needs twice as much money to buy groceries than before the sanctions. Analysts have forecast Russian inflation could soar to 24% this year, while the economy may shrink to 2009 levels. The United States and Europe are weighing more sanctions against Russia after Ukraine accused Russian forces of civilian killings in northern Ukraine, where a mass grave was found in Bucha, outside Kyiv. Russia calls its actions in Ukraine a "special operation" and the Kremlin categorically denied any accusations related to the murder of civilians, including in Bucha. One source of hope for some in Kaluga, with its 325,000 residents, is the West may be reluctant to hurt its own companies. "Does it make sense to impose sanctions on its own plant and lose money?" said Valery Uglov, an auto mechanic at the Volkswagen plant. "Does it make sense to lose the Russian market?" "We hope to return to work as soon as possible and everyone will have confidence in the future again," Uglov said. Volkswagen, whose factory employs 4,200 people, in early March suspended operations. A spokeswoman said production remained frozen. Volvo Group, which employs over 600 people to build trucks, also suspended production. Even before the sanctions, Russian car sales had contracted from 2.8 million units from when the Volkswagen factory opened in 2007 to 1.67 million units last year, damaged by both sanctions after the 2014 annexation of Crimea and the COVID-19 pandemic.

Daimler and Geely collaborate to develop 'a highly efficient modular engine'

BERLIN — German car maker Daimler said on Tuesday it will cooperate with China's Geely to build next-generation combustion engines for use in hybrid vehicles. Efforts to share development costs come as the growth potential for combustion engines faces the twin threat of the COVID-19 crisis and stricter fuel-efficiency and emission rules. "The companies plan to develop a highly efficient modular engine," a spokesman for Daimler said, adding that it would be used in hybrid drivetrains and manufactured in Europe and China. Geely declined to comment. The modular engine will be used in cars under different marques at Geely and Daimler, a person familiar with the matter said on condition of anonymity as the companies are still in the early stages of developing the engine. News of the alliance was a surprise to Daimler's works council at its factory in Untertuerkheim, which specializes in electric and gasoline powertrain assembly. "We are speechless. There was not even a discussion about potential alternative manufacturing locations," said Michael Haeberle, the works council chief for Untertuerkheim. "We have the ability to build four-cylinder engines in Untertuerkheim, but there were no talks about it." Daimler said German factories will be retooled gradually to add electric drivetrains production. Most of the next-generation combustion engines will be made in China, business daily Handelsblatt reported. The alliance with Geely, which owns a 9.69% stake in Stuttgart-based Daimler, means that parts of Daimler's existing partnership with Renault could be pared back. A Renault source told Reuters that the Daimler-Geely project does not mean an end of cooperation between Daimler and Renault. Citing Daimler sources, Handelsblatt said the Daimler-Geely pact would save the German carmaker a "triple-digit million sum" — implying an amount above 100 million euros ($119 million) and less than 1 billion euros. Green Mercedes-Benz Volvo Hybrid Daimler Geely

We dialed a random Swede, talked about not driving Volvos

The Swedish Number is now a thing. It's a cool thing. You dial, a random Swede picks up, and you chat. Or, in my case, you dial and a random Brit living in Sweden for the past six year picks up and you chat. Since I was calling on behalf of Autoblog, when I got Martin from the small coastal town of Sundsvall, on the phone, we talked about cars, Volvos (natch), and cold-weather testing. Oh, and about plugging in his regular Toyota Prius. ABG: I was able to come to Sweden and test Volvos a month or so ago. Do you drive a Volvo? Martin: [laughs] No. I think Volvo is a fantastic car. It truly is an amazing car, but no. My girlfriend has a company car, so we drive a hybrid Toyota Prius. ABG: And how does that work in the cold winters? It obviously cuts down on the environmental problems. Martin: No problem at all. Because we have these cold winters, like you do get in the States as well, where we park our cars, we've got electricity posts where we can plug in the cars. Motor car engines have a heater, so you can have the heater going for some time before you get into the car. So it warms up the engine and there's a socket inside the car to warm up the inside of the car as well. It's very efficient. You just need to remember to set the timer when you climb out of the car and connect the cable. It obviously cuts down on the environmental problems as well because your car is already warm before you start them. ABG: I know that makes them overall more efficient, I just didn't know it could work with any car. It used to be you would keep the diesel engine blocks warm, but this works for pretty much any car in Sweden? Martin: Yes. Our temperatures here can vary. We do tend to get roundabout -18 to -25C [0 to -15F], where I live, sometimes. Normally, in the winter, we always plug the car in to make it more environmentally friendly, for starters, and then it's a nice warm car when you get in. The coldest I remember it getting here was -36 [-33F]. In the north of Sweden they've had, on record, -56 [-69F]. ABG: That's too cold. Martin: That is cold, yeah. Most countries, now, use the north of Sweden to test their cars because of the ice. Volvo S90 Prototype View 15 Photos ABG: That's actually why I came over there, to test out the new XC90s and S90s. Martin: Is that your job, then? ABG: I don't test the cars for the companies, but I test them for Autoblog. They'll invite us to test the vehicles so we can see for ourselves what the vehicles do in cold weather.