Renault’s exit from the Russian market is consolidating. Cornered by Western sanctions against Russia, the automaker, leader in the country with the Lada brand, confirmed on Monday that it was selling its assets to the Russian state. This is the first major nationalization since the Russian offensive in Ukraine.
The French group however specified that it kept the option to buy back for six years its shares in Avtovaz, manufacturer of the Lada. “Agreements have been signed for a transfer of Russian assets from the Renault group to the Russian Federation and the government of Moscow,” the Russian Ministry of Industry and Trade said in a statement.
The “symbolic rouble”
Renault has confirmed for its part the sale of its nearly 68% stake in Avtovaz, the main car manufacturer in Russia. But the French group said it would keep the option to buy back its shares for six years.
No financial details were provided on Monday, but Russia’s Industry and Trade Minister Denis Manturov said in April that Renault planned to sell its Russian assets for “a symbolic rouble”.
“Coming back to the country in the future”
“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 group’s performance and our ability to return to the country in the future, in a different context,” said Renault CEO Luca de Meo. , quoted in a press release from the group.
Renault’s board of directors “unanimously approved the signing of agreements to sell 100% of Renault Group’s shares in Renault Russia to the city of Moscow and its 67.69% stake in Avtovaz to NAMI (the Central Institute for Research and Development of Automobiles and Engines)”, according to this press release, where Renault does not give any amount.
Second market of the Renault group
Moscow Mayor Sergei Sobyanin said Renault had decided to close its factory near the Russian capital, which produces Nissan and Renault cars. Russia is the Renault group’s second largest market in the world behind Europe, with nearly 500,000 vehicles sold in 2021, but the group’s presence in the country has been called into question since the start of the Russian offensive in Ukraine.
The automotive group is also facing logistical problems due to a shortage of imported components caused by Western sanctions. Avtovaz had to send its employees on paid leave for three weeks in April, stopping most of its production.