Renault is selling its Russian business, including a controlling stake in Lada, becoming the last carmaker to leave the country due to the invasion of Ukraine.
In a statement issued this morning, the French company said it had agreed to sell Renault Russia to Moscow and a nearly 68% stake in its parent company, Lada AvtoVAZ, to a state-owned industry research center (NAMI). Renault does not rule out the possibility of returning to Russia – the agreement gives the company the opportunity to buy back its stake in AvtoVAZ over the next six years, the company added.
“Today, we have taken 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,” Renault CEO Luca de Meo said in the statement.
It will be recalled that on March 23, Renault announced that it was shutting down its Moscow plant and taking on almost $2.3 billion to write off the value of its Russian business to zero. In 2021, the AvtoVAZ brand Lada occupied almost 21% of the Russian market.
Western automakers, along with other multinational companies, have decided to leave the Russian market after the Russian president’s decision to invade Ukraine in February. Toyota and Volkswagen were among many companies that announced in early March the cessation of production and exports to the country.
Shortly before this announcement, Renault became one of the few French companies that Ukrainian President Volodymyr Zelensky called continuing its activities in Russia. The Minister of Foreign Affairs of Ukraine Dmytro Kuleba went further, calling for a global boycott of the automaker.
Car sales in Russia fell sharply after the invasion due to Western sanctions and an exodus of foreign companies. In March, only 55,000 new cars and light commercial vehicles were sold, which is 63% less than in the same month last year.
Lada – as a symbol of Soviet self-confidence – could theoretically benefit from the absence of foreign competition. But it very much depends on imported spare parts. The company moved the summer vacation for the entire company to April and announced that it would switch to a four-day work week for three months, starting in June, to try to save more than 40,000 jobs. The company also said it would develop new Lada models to make them less dependent on imports. The company did not specify which models will be used, but said they will gradually become available in the coming months.
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