Renault resolves to draw a line under its Russian adventure

The Avtoframos car factory (Russian subsidiary of Renault), in Moscow, in April 2005.

The pressure had become too great and to turn our backs against the Russian invasion of Ukraine was no longer a tenable position. Groupe Renault – the world-class car manufacturer most established in the country of Vladimir Putin – announced, on Wednesday evening March 23, the suspension of its industrial activity in Russia in a short press release following a special meeting of its board of directors.

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This is a shocking and major announcement for the French company because Renault is now opening the door to a definitive departure from Russia. However, this market is one of the most important for Renault, more precisely its second country after France in terms of vehicle sales (almost 500,000 registrations in 2021). The Diamond has its own activities there – a factory in the capital – and, above all, it owns (67.7%) the historic manufacturer AvtoVAZ (Lada brand). In total, Russia accounts for no less than half of the operating profit of Renault’s automotive division.

Russia, second market after France

First, with regard to its own brand, “the activities of the Renault factory in Moscow are suspended from this day”, indicates the French manufacturer in its press release. The Moscow site, which had been shut down since February 29 for lack of supply, had resumed in the last three days after a batch of parts reached the factory. “The company finished the cars that were being manufactured, they emptied the lines, then closed everything”details a good connoisseur of the company.

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With regard to the fate of strictly Russian activities, the situation is much more complicated. ” The group is evaluating possible options regarding its stake in AvtoVAZ, while acting responsibly towards its 45,000 employees in Russia,” carefully explains Renault. It is not said clearly, but the tricolor group seems to be looking for a definitive exit door. Except that, according to an inside source, there is a stalemate: “Separating from Renault’s stake in AvtoVAZ is a headache: financial transactions with Russia are prohibited but there is no question of letting go of the company for nothing after all that we have undertaken there. »

It was in 2008 that, sponsored by Vladimir Poutine and Carlos Ghosn, Renault entered the capital of the Russian manufacturer. First at 20%, to gradually reach two-thirds of the shares. Losange has invested nearly 2 billion euros in the ex-Soviet company. He modernized the two industrial sites (Izhevsk and the giant factory of Togliatti, which employs 35,000 people), he rejuvenated and modernized the range, he rationalized the industrial processes, bringing the know-how and the organization of the Renault-Nissan-Mitsubishi Alliance. the old Kombinat became profitable from 2017, while claiming a 28% market share.

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