Russian assets of Renault sold to Moscow

In the midst of Moscow’s invasion in Ukraine and foreign companies pulling out of the country, Renault, the French car maker, has sold off its Russian assets to the Russian government. Because of the military invasion of Russia in Ukraine, Renault had 68% stake at the largest carmaker in Russia, AvtoVAZ, with Lada, the top brand of the country. Nearly half a million vehicles were sold in Russia which was the second largest market of Renault, behind Europe. The ministry in a statement noted that for the transfer of assets that the Renault Group held in Russia, agreements were signed. As per the terms of the agreement, Renault can purchase the stake in AvtoVAZ with a six-year option. The Moscow plant of Renault was also included in the deal.
Luca de Meo, the chief executive of Renault, mentioned in a statement: “We have decided on a difficult yet important matter as we intend to make a responsible and fair choice towards the 45,000 employees that we have in Russia, at the same time conserving the performance of the Group and the possibility of us returning to the country in future in different circumstances.”
Sergei Sobyanin, the Moscow mayor, said that Renault has taken the decision to close its plant in Moscow; however, it cannot permit thousands of workers to be left with no work. He also informed his decision to recommence the passenger cars production under Moskvich, the Soviet era brand.
Renault has faced difficulties in its operations since the Russian invasion of Ukraine due to the scarcity of components after the curbs due to Western sanctions. It has also faced pressure from the Ukrainian authorities who called for prohibition of its vehicles until it stops operations in Russia.