Renault has suspended operations in Russia. And he thinks what to do with AVTOVAZ

According to an official statement on the company’s global website, Renault has ceased operations in Russia. The decision was taken at a meeting of the Renault Group Board of Directors, which approved the following provisions:

  • Since March 23, the Renault Group’s activities at the Moscow plant have been suspended.
  • With regard to the stake in AVTOVAZ, the Renault Group is evaluating the options available given the current situation and is acting responsibly towards its 45,000 employees in Russia.

The Renault group recalled that they had taken the necessary measures to comply with international sanctions.

In connection with the decision, the company will revise its economic forecast for 2022, reducing operating profit growth from 4% to 3%. The free cash flow from automotive activities is still presented as positive, without stating the amount, it was previously estimated at more than 1 billion euros. The Renault group remains focused on the implementation of the strategic plan Renaulution, of which AVTOVAZ was part until recently.

Recall that the Renault plant in Moscow recently started working again after a shutdown due to a lack of spare parts. The full cycle factory with welding, painting and assembly shops, an engineering center and an underground test site has so far produced Duster, Kaptur, Arkana and Nissan Terrano. In 2013-2019, the volume of investment in the development of the enterprise amounted to 18 billion rubles.

Earlier, Bloomberg reported that Renault is studying possible options to wind down its activities in Russia in connection with the situation in Ukraine. Renault’s decision came late on March 23, just hours after Ukrainian President Volodymyr Zelenskyy recorded a video message to French lawmakers that car companies, including Renault, should immediately leave Russia, ending their support for it.

Recall that 68% of AvtoVAZ shares are owned by Renault Group and 32% by Rostec. For France and Russia, this decision is very sensitive: as the French government is the most authoritative shareholder of Renault, and the state-owned company Rostec is a partner of AVTOVAZ.

Source: Z R

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