Renault is weighing the option of transferring ownership of its Russian subsidiary to a local investor as a potential exit from the country, according to Bloomberg sources. The move would allow Renault to step back from its Russian operations and seek bankruptcy relief for the subsidiary while limiting the company’s exposure to future liabilities.
This transfer approach is currently favored as a means to shield Renault from ongoing legal responsibilities tied to the Russian entity that makes the Lada brand and employs about 45,000 people. Renault has signaled a pause in industrial activity in Russia and emphasized a commitment to engaging with its Russian workforce in a responsible manner. In the meantime, no final decision has been made, and other avenues may surface to address the situation. How the Renault Moscow plant would be integrated into any plan remains uncertain. Complicating the outlook, Renault cannot transfer its 68 percent stake in AVTOVAZ to its co-owner Rostec, the state-owned corporation, due to sanctions on the Russian partner.
At the close of last year, Renault assessed its Russian operations at roughly 2.2 billion euros, a valuation that includes goodwill. Russia accounted for about 10 percent of Renault’s revenue, and AVTOVAZ’s margin stood at 8.7 percent, significantly higher than the 0.6 percent margin recorded by Renault’s non-Russia automotive segment when excluding the business. These figures reflect the strategic importance of Russia for Renault, even as the company considers structural moves to manage risk and future profitability.
Industry observers note that the Russian auto sector has faced a sharp disruption in supply chains, with shortages of imported components impeding production. In that context, AVTOVAZ has continued to operate two manufacturing sites, one in Tolyatti and another in Izhevsk, producing vehicles and various components for the Lada and Renault brands. Renault Group holds a controlling stake of 68 percent in AVTOVAZ, with Rostec owning 32 percent. The evolving plan for ownership and the potential role of AVTOVAZ in any restructuring will likely hinge on sanction developments, regulatory approvals, and the overall strategic priorities Renault sets for its European and global operations.
Despite the challenges, the Russian subsidiary remains a major anchor for Renault in the region, illustrating how geopolitical risk and local manufacturing capabilities intersect with global corporate strategy. The coming weeks are expected to clarify whether Renault advances a transfer to a local investor, seeks a formal bankruptcy framework for the subsidiary, or pursues alternative arrangements that preserve value for stakeholders while addressing regulatory constraints and the broader market environment.