The French group disclosed on Wednesday that the Renault plant in Moscow has halted operations. For the first time, collaboration with AvtoVAZ was noted in the company’s statement. The European manufacturer indicated it is evaluating multiple scenarios for continuing its involvement in Russia’s market.
“Regarding the stake in AvtoVAZ, Groupe Renault is weighing options in light of the current environment and is acting to safeguard the 45,000 employees in Russia,” the company stated.
Meanwhile, Ukrainian President Volodymyr Zelensky called on Renault to exit Russia during a recent address via video link to the French Parliament. Earlier, Ukrainian Foreign Minister Dmitry Kuleba urged a boycott of Renault for not leaving the Russian Federation.
Pressure on Renault, which remains active in Russia amid sanctions that have hit many foreign automakers, intensified after discussions in the United Kingdom. Opposition figure Chris Bryant, who previously pushed for sanctions against Roman Abramovich, urged a boycott of Renault in Britain.
In 2021, AvtoVAZ shifted from Dutch offshore ownership to Russian jurisdiction. The newly formed entity Lada Auto Holding shows Renault owning 67.61% of the stake, with Rostec, the state-owned company on the U.S. sanctions list, holding the remainder.
Following Renault’s announcement, Russia’s Ministry of Industry and Trade assured AvtoVAZ of ongoing support, including loading capacity enhancements, starting new car modifications, continuing localization efforts, and accelerating import substitution. The state also provided various subsidies and extended the deadline for salvage payments through the end of the year.
The ministry also pledged to discuss the Moscow metro area’s development prospects with city authorities and planned to publish joint choices by April 3.
Russia remains Renault’s third-largest market by car sales. Last year, more than 131,000 vehicles were sold in Russia, compared with 134,000 in Germany and 394,000 in France.
How AvtoVAZ Could Be Reconfigured
Sergey Tsyganov, a Russian auto industry writer, notes that AvtoVAZ has several crisis-response options under consideration. The source does not believe that both Renault and AvtoVAZ management would exit Renault Russia entirely. The key question is whether Renault might pause Moscow operations while maintaining AvtoVAZ ownership, or pursue a partial withdrawal with continued capital ties to AvtoVAZ.
There is a possibility Renault could leave Russia yet keep AvtoVAZ intact, with reorganization aimed at preserving local production. In this scenario, AvtoVAZ might remain the production arm while Renault steps back from direct ownership of the Moscow assets, Tsyganov contends.
Reacting to Renault’s statement, AvtoVAZ issued a cautious note about replacing several critical imported components with domestic alternatives. In the coming months, Lada models designed to be less dependent on imported parts will be developed for Russian customers, according to the brand’s press service.
Speculation centers on Renault potentially exiting the AvtoVAZ framework, which could trigger reshuffling at the top management of the Russian operation. If that occurs, Rostec might assume greater oversight, while AvtoVAZ would continue using existing platforms for vehicle production, a source says. The platforms are not considered obsolete, the expert notes.
Analysts warn that prices for Lada cars could rise even as production shifts to domestic components. The expectation is that the first specialized versions of Lada will appear in May. Analysts also indicate that removing foreign components and substituting domestic ones would require reestablishing ties with Russian component suppliers previously engaged during the change from the Renault supplier panel, according to Tsyganov.
Some subcontractors remain active, supplying components for the secondary market. Domestic parts are often more costly and may be of varying quality, though the impact on overall vehicle cost would be manageable. Electronics shortages are forcing simplifications in fuel systems.
AvtoVAZ is considering a switch to Euro-2 for certain models, though not universally. The move reflects the difficulty of substituting critical import components, especially lambda probes. To accelerate a solution, sensors can be removed from exhaust systems, allowing production under Euro-2 standards—an approach that would set the plant back to a technology level seen around 2006–2008.
The core challenge, says Tsyganov, is not just technical substitution but the legal framework for vehicle registration under current type approvals. Regulations remain fixed, complicating a full shift to domestic suppliers without new regulatory alignment.
Global Shifts for Russia
At the start of 2021, Renault announced a broader plan to integrate AvtoVAZ more deeply within the group and to establish a Dacia-Lada division. The plan envisioned a revamped product lineup for AvtoVAZ and a modular CMF-B platform, with several new models slated for release by 2025, including a brand-new generation of Niva and a compact crossover in 2024.
In mid-March, AvtoVAZ unveiled a new model based on Renault’s CMF-B platform. Nicolas More, the company’s head, visited a pre-production workshop where the first sample was shown. Although production was presented as imminent, many components remained imported.
Renault and AvtoVAZ have not responded to inquiries about the potential split of the joint venture in Russia or continued assembly at the Russian facility.