Moscow acquires Russian assets of French Renault, Marketing & Advertising News, ET BrandEquity

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French carmaker Renault has sold its Russian assets to the Russian government, the two sides announced on Monday, as foreign companies leave the country amid Moscow’s military campaign in Ukraine.

Renault controlled 68% of AvtoVAZ, Russia’s biggest automaker along with Lada, the country’s top brand, but was under pressure to pull out of the country since Russia’s military intervention in Ukraine.

Thanks to AvtoVAZ, Russia was the Renault group’s second largest market last year behind Europe, with around half a million vehicles sold.

“Agreements have been signed on the transfer of Russian assets from the Renault group to the Russian Federation and the Moscow government,” the ministry said in a statement.

Under the terms of the agreement, Renault will retain a six-year option to buy out the stake in AvtoVAZ.

The deal also included Renault’s Moscow plant.

No financial details were provided but Russian Industry and Trade Minister Denis Manturov said in April that Renault planned to sell its Russian assets for “a symbolic rouble”.

“Today, we have made a difficult but necessary decision; and we are making a responsible choice vis-à-vis our 45,000 employees in Russia, while preserving the Group’s performance and our ability to return to the country in the future. future, in a different context,” said Renault. Chief Executive Luca de Meo said in a statement.

Moscow Mayor Sergei Sobyanin said Renault had decided to close its plant in the capital.

“It is his right, but we cannot leave thousands of workers out of work,” Sobyanin said in a statement, adding that he had decided to resume production of passenger cars under the Soviet-era Moskvich brand. .

“In 2022 we will open a new page in Moskvich’s history,” he added.

“We will try to keep most of the team working directly at the factory and with their contractors.”

Since President Vladimir Putin sent troops to Ukraine on February 24, Renault has struggled to maintain operations due to a lack of components following the imposition of Western sanctions.

Ukrainian authorities have also put pressure on Renault, calling for a boycott of its vehicles until it withdraws from Russia.

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