Sold for a ruble?
Renault’s holdings in Russia are nationalized
05/16/2022, 2:31 p.m
The French carmaker had invested billions in Russia. Now Renault is giving up its Moscow plant and stake in Lada-maker Avtovaz — and apparently for nothing. Nevertheless, the French could return. And Moscow wants to revive a brand from Soviet times.
Russia has nationalized the property of the French carmaker Renault in the country: The group and the Ministry of Trade in Moscow announced that the majority stake in the Russian carmaker Avtovaz and the plant in Moscow went to the Russian state. A price was not mentioned – but Russia’s Trade Minister Denis Manturov said in April that Renault was planning the sale for “a symbolic ruble”. The carmaker put the value of the Russian business at 2.2 billion euros.
Renault boss Luca de Meo said: “Today we made a difficult but necessary decision – a responsible decision for our 45,000 employees in Russia.” Renault stressed that the company has a six-year option to buy back the Avtovaz shares. De Meo said Renault could return to Russia “in the future, in a different context”.
Renault announced its withdrawal from Russia on March 24, a month after the start of the Ukraine war. Work at the Moscow plant has been suspended. At that time, Renault already said that the options for participating in the Lada manufacturer Avtovaz were being examined. The value of the investments in Russia of around 2.2 billion euros will be booked out in the first half of 2022. “I have confidence in Renault Group’s ability to continue accelerating its transformation and exceeding its mid-term goals,” said de Meo.
Russia was a very important market for Renault. In 2021, the group sold 500,000 cars there. Since the start of the Ukraine war, car sales in the country have plummeted. Avtovaz had to almost completely stop production.
Renault joined Avtovaz in 2008 and became the majority shareholder in 2014, most recently holding 68 percent of the shares. The group invested billions in the conversion. The minority shareholder was the Russian state-owned company Rostec, which is headed by Sergei Chemezov, a confidante of Russian President Vladimir Putin. Avtovaz operates a huge plant with 35,000 employees in Tolyatti in south-west Russia. Specifically, the Renault shares are now going to the Russian Research and Development Center for Cars and Engines (Nami).
Moskvitch should return
The work in the city area goes to the city of Moscow. Renault had produced Renault and Nissan cars there. Moscow Mayor Sergei Sobyanin announced that the Soviet cult car Moskvich should be produced again in the factory in the future.
Regarding Renault’s decision, he said: “It is your right, but we cannot allow a collective with many thousands of workers to remain unemployed.” That’s why it was decided to take over the plant and restart car production under the “historic Moskvich” brand. Efforts are being made to retain most of the workforce.
The technology partner for the rebirth of the Moscow automobile plant Moskvich will be the Russian car giant Kamaz. In a first stage, combustion engines should be produced. Electric cars should also be added later. Kamaz and the Ministry of Industry and Trade are also in the process of locating the production of a maximum number of suppliers in Russia, Sobyanin said. The Moscow plant has a long and glorious history. Ford produced there almost 100 years ago. The Moskvitch was built there for decades, production of which was discontinued in 2001. Cooperation with Renault began in 1998, Sobyanin continued. The Logan, Duster and Sandero models rolled off the assembly line at the plant. “In 2022 we will open a new chapter in the “Moskvitch” story.”
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