Renault decides to end its Russian adventure

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

The pressure had become too great and turning our backs on the Russian invasion of the Ukraine was no longer a tenable position. Groupe Renault, the most established world-class automaker in Vladimir Putin’s country, announced, on Wednesday evening, March 23, the suspension of its industrial activity in Russia in a brief press release after a special meeting of its board of directors.

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This is a shocking and important announcement for the French company because Renault now opens the door to a definitive exit 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). El Diamante 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 of all, as for your 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 closed since February 29 due to lack of supply, had resumed in the last three days after a batch of parts arrived at the factory. “The company finished the cars that were being manufactured, they emptied the lines, then they 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 participation in AvtoVAZ, while acting responsibly towards its 45,000 employees in Russia.” Renault carefully explains. It is not said clearly, but the tricolor team seems to be looking for a definitive exit door. Except, according to an insider source, there’s a deadlock: “Separating from Renault’s stake in AvtoVAZ is a headache: financial transactions with Russia are prohibited, but it’s not about leaving the company for free after everything we’ve done there. »

It was in 2008 when, sponsored by Vladimir Poutine and Carlos Ghosn, Renault entered the capital of the Russian manufacturer. First to 20%, to gradually reach two thirds of the shares. Losange has invested almost 2,000 million euros in the ex-Soviet company. It modernized the two industrial sites (Izhevsk and the gigantic Togliatti factory, which employs 35,000 people), rejuvenated and modernized the range, streamlined the industrial processes, bringing in the know-how and organization of the Renault-Nissan-Mitsubishi Alliance. the old To combine became profitable as of 2017, while claiming a 28% market share.

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