War in Ukraine: Renault resolves to draw a line under its Russian adventure

The Avtoframos automobile factory (Renault’s Russian subsidiary), in Moscow, in April 2005. ILDAR AZYUKOV / AFP The pressure had become too great and turning a blind eye to the Russian invasion of Ukraine was no longer a tenable position. Groupe Renault – the world-class car manufacturer most established in the country of Vladimir Putin – announced, on Wednesday evening March 23, the suspension of its industrial activity in Russia in a short press release which followed an extraordinary meeting of its board of directors. Read also Article reserved for our subscribers War in Ukraine: French companies present in Russia under fire from calls for a boycott This is a shock and major announcement for the French company because Renault is now opening the door to a departure final from Russia. However, this market is one of the most important for Renault, more precisely its second country after France in terms of vehicle sales (almost 500,000 registrations in 2021). The Diamond has its own activities there – a factory in the capital – and, above all, it owns (67.7%) the historic manufacturer AvtoVAZ (Lada brand). In total, Russia accounts for no less than half of the operating profit of Renault’s automotive division. Russia, second market after France First, as regards its own brand, “the activities of the Renault factory in Moscow are suspended from this day”, indicates the French manufacturer in its press release. The Moscow site, which had been shut down since February 29 for lack of supply, had resumed in the last three days after a batch of parts reached the factory. “The company finished the cars that were being manufactured, it emptied the lines, then closed everything,” explains a good connoisseur of the company. Read also Article reserved for our subscribers Between KGB and industrial transformation, Renault’s Russian saga As regards the fate of Russian activities, the situation is much more complicated. “The group is evaluating the possible options concerning its stake in AvtoVAZ, while acting responsibly towards its 45,000 employees in Russia”, explains Renault cautiously. It is not said clearly, but the tricolor group seems to be looking for a definitive exit door. Except that, according to an internal source, there is an impasse: “Separating from Renault’s stake in AvtoVAZ is a headache: financial transactions with Russia are prohibited but there is no question of letting go of the company. for nothing after all that we have undertaken there. It was in 2008 that, sponsored by Vladimir Poutine and Carlos Ghosn, Renault entered the capital of the Russian manufacturer. First at 20%, to gradually reach two-thirds of the shares. The Diamond has invested nearly 2 billion euros in the ex-Soviet company. He modernized the two industrial sites (Izhevsk and the giant factory of Togliatti, which employs 35,000 people), he rejuvenated and modernized the range, he rationalized the industrial processes, bringing the know-how and the organization of the Renault-Nissan-Mitsubishi Alliance. The former Kombinat became profitable from 2017, while claiming a market share of 28%. You have 52.99% of this article left to read. The following is for subscribers only.