Renault had already suspended its activities in Russia because of the war in Ukraine. This time, the diamond brand has sold its entire Russian subsidiary, as well as its assets in the Russian company Avtovaz to the Russian public authorities.
Renault puts an end to its activities in Russia because of the war in Ukraine
This Monday, May 16, the Renault group has finally signed agreements of sale for its Russian subsidiary, as well as for its stake in the Russian automobile company Avtovaz. This decision comes in a context of conflict in Ukraine and Western sanctions against the Russian bloc.
In detail, Renault specifies that its board of directors has unanimously approved the sale of all of its shares in Renault Russia to the city of Moscow, as well as its possession of 67.69% of the shares of Avtovaz. at NAMI (Central Automotive and Engine Research and Development Institute). Note that Avtovaz produces, among other things, vehicles of the Russian brand Lada. “Agreements have been signed for a transfer of the Russian assets of the Renault group to the Russian Federation and to the government of Moscow”, specifies the Russian Ministry of Industry and Trade.
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Renault gives itself the possibility of returning to Russia
The Renault group nevertheless leaves itself the possibility of relocating to the largest country in the world if the situation changes. “Today we made a difficult but necessary decision; and we are making a responsible choice towards our 45,000 employees in Russia, while preserving the performance of the Group and our ability to return to the country in the future, in a different context”, explains the CEO of the group, Luca de Meo.
Thus, in the next six years, Renault will be able to exercise a buyout option for Avtovaz, which should for the moment continue its activities in Russia alone. But with this assignment, Renault has revised its objectives downwardsforecasting an operating margin of 3% and no longer 4% in 2022. The cost of these operations is approximately 2.2 billion euros in the results of the first half.
Stellantis had already closed its only factory in Russia
As a reminder, Renault was very established in Russia. This country was even their second largest market in the world after Europe and Renault sold nearly half a million vehicles there in 2021. Its plant near Moscow produced Renault brand vehicles as well as Nissan for the group.
Renault is not the only group to have abandoned its activities in Russia following the conflict with Ukraine. Last April, Stellantis (PSA-Fiat-Chrysler) also had closed its only factory in Russia. But unlike the Renault group, Stellantis only held 1% of the Russian market and only sold 100,000 vehicles in Russia in 2021.
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