France’s Renault Group Forced To Sell Its Russian Assets To Moscow

The Russian assets of French automobile company Renault are now property of the Russian government. The Russian trade and industry ministry said that agreements were signed regarding the transfer of Russian assets of the Renault Group to the Russian Federation and the government of Moscow.

The Renault Group also in a statement said that it has sold 100% of Renault Group’s shares in ‘Renault Russia to Moscow City entity and its 67.69% interest in AvtoVAZ to NAMI (the Central Research and Development Automobile and Engine Institute)’.

The release also said that the transactions are not subject to any conditions.

The release said that the agreement allows the Renault Group an option to buy back its interest in AvtoVAZ, hence the French car company will retain a six-year option to buy back the stake in AvtoVAZ. With 500,000 vehicles sold last year, Russia was Renault Group’s second-largest market after Europe.

“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,” Luca de Meo, CEO Renault Group said.

“I am confident in the Renault Group’s ability to further accelerate its transformation and exceed its mid-term targets,” he further added.

Renault’s withdrawal comes after Ukrainian president Volodymyr Zelensky last month singled out French companies like Renault, Leroy Merlin, supermarket chain Auchan and sporting goods chain Decathlon for continuing their operations in Moscow while the rest of the global companies were withdrawing from Russia.

Ukrainians also said that they would boycott Renault for continuing its operations in Russia.

Moscow mayor Sergei Sobyanin said that thousands of workers cannot be left without work. According to a report by AFP, he said that production of passenger cars under the Soviet-era Moskvich brand will continue.

“In 2022, we will open a new page in the history of Moskvich. We will try to keep most of the team directly working at the plant and with its subcontractors,” Sobyanin was quoted as saying by AFP.

Renault was also facing difficulties while working in Russia due to a lack of components following the imposition of sanctions by the US and the rest of the western world.

(with inputs from AP and AFP)

Read all the Latest News here