french tire manufacturer Michelin said on Tuesday that it plans to hand over its activities Russia To a new unit under local management by the end of the year.

Michelin suspended its manufacturing activities in Russia on 15 March due to supply difficulties following Moscow’s invasion of Ukraine.

“In the context of general uncertainty, particularly due to supply issues, it is technically impossible to resume production,” the company said in a statement.

Michelin has a balance sheet exposure of 250 million euros ($265 million) from Russian operations, saying the transfer would not affect its financial guidance.

It said the new entity would operate through an independent framework.

According to the group, Michelin sales in Russia account for 2% of total sales and 1% of global car tire production.