According to foreign media reports, on Wednesday, Russian local auto company Lada will suspend production at its factory. Due to Western sanctions, its parent company is experiencing parts shortages.

　　Thousands of workers have been furloughed, according to people familiar with the matter. The suspension of production of Lada cars shows that Russian cars are affected by Western sanctions.

　　After the outbreak of the Russo-Ukrainian war, Russia was excluded from the Swift interbank payment system, which made it difficult for Russian companies to cooperate with suppliers in transactions, especially because of the war, supply routes between Russia and Ukraine were interrupted.

　　In addition, the depreciation of the ruble due to economic sanctions has caused the cost of Russian companies to purchase parts from abroad to soar, increasing the cost of enterprises.

　　The Soviet Times said that Lada’s parent company, AvtoVAZ, had built a factory on the Volga River to foster a local supply chain. But for now, AvtoVAZ relies on parts made in Romania by French car company Renault SA and the Togliatti plant to assemble cars, people familiar with the matter said. It said that more than 20% of AvtoVAZ's components and core electronic products are from outside Russia.

　　"If foreign trade stops, so does AvtoVAZ," said a former official of the AvtoVAZ board.

　　A spokesman for AvtoVAZ said the company plans to suspend production at its factories until March 11 and the chip shortage has affected automakers around the world, declining to comment on the sanctions. In addition, the company will make layoffs and partially compensate the laid-off employees. But factory production line workers and sales staff, as well as customer service, are not among the layoffs. The spokesman added that the company will make every effort to resume business, as well as production at the Togliatti and Moscow plants.

　　According to public information, Lada is the local brand with the highest market share, accounting for 21% of Russian car sales last year.

　　At present, most foreign automakers have stopped production in their Russian factories. Russia's current car ownership is 46 million, with an average lifespan of nearly 15 years.

　　Brokerage analyst Thomas Besson said, "They still need to act, no matter what state the country is in. War or not," Besson said. "There is still a need for people who make cars. Avtovac is the representative of the Russian auto industry. "

　　Lada and AvtoVAZ are also part of Russia's National Security Council, much like General Motors in the US. The Lada is a symbol of the rise of the Russian auto industry. "Automobile editor Nikita Novikov said.

　　According to public information, AvtoVAZ was founded in 1966, when the Soviet Union built a huge factory on the banks of the Volga River. The factory covers more than 1,000 square meters of acres, more than New York's Central Park.

　　In the early days of its establishment, its products were selling well, and consumers often had to wait several years to get a car. The brand is world-renowned for its longevity, with the iconic LaDa NIVA, considered by some to be the precursor to the modern SUV.

　　However, by the mid-2000s, Avtoise was in trouble due to corruption, lack of productivity and competitiveness, and was acquired by French manufacturer Renault in 2007.