Nokian Tyres staying in Russia

Nokian Tyres has explained the decision to retain its manufacturing operation in Russia, a facility that reportedly produced 82 per cent of Nokian’s passenger and light commercial vehicle tyres last year. The Finnish tyre maker states that by continuing to operate the passenger car tyre factory in Vsevolozhsk, Russia it wants to “make sure that the factory is operated and controlled by Nokian Tyres also in the future.”

The company adds that it is no longer investing into Russian production. Instead, it will accelerate the increase of capacities at its factories in Finland and the USA. In future, all tyres sold in Nordic countries will be produced at Nokian Tyres’ plant in Finland and all tyres sold in North America will either be produced at its Dayton, USA plant or in Finland. While the statement Nokian Tyres issued earlier today doesn’t address future production arrangements for tyres sold in Central and Western Europe, the company says it is “actively looking for additional capacity and aims to become geographically more diversified in its manufacturing operations.”

As mentioned in previous correspondence, all Nokian heavy tyres are manufactured at the company’s plant in Nokia, Finland, while its truck and bus tyres are produced in facilities within the European Union. While such products have potential military applications, Nokian Tyres stated today that “we don’t accept orders for heavy tyres from Russia.”

Assisting Ukrainian team

Nokian Tyres maintains daily contact with its Ukraine-based team and says it has helped and continues to help employees and their families stay safe. “Over half of our Ukrainian employees are male and cannot leave the country, but we assist them in any way possible given the current situation. In addition, Nokian Tyres has made a donation to UNICEF to help the children in the war zone in Ukraine.”

The tyre maker does not “want to speculate on how the situation in general will evolve” and says it will announce any material direct impacts to Nokian Tyres “as appropriate and in a timely manner.” The company will continue to assess the situation and is “prepared for rapid responses” when needed.

Market share questions follow analyst call

The Nokian Tyres share price decreased by more than 13 per cent on Friday’s closing price yesterday afternoon after news regarding the intention to continue production in Russia was made public. Joonas Korkiakoski, a market analyst from Finnish financial analysis company Inderes, wrote that Nokian Tyres could increase its market share in Russia by remaining after its competitors leave the country.

In today’s statement, Nokian Tyres noted that it was “on the spotlight in the media” following an analyst call. The company observed that “certain statements were referred to as they would have been Nokian Tyres’ statements,” and added that “correction to the media have been made.”