Russia’s aggression in Ukraine not only destroyed the next country but also caused a stir all over the world. One of the many businesses affected by the conflict is Renault, which has a majority stake in Russian carmaker AvtoVAZ (and its Lada brand) and makes cars there.
Now, the French carmaker is reported to be selling 63% of its shares to Russia through the state-owned Central Scientific Research Institute of Automobile and Automotive Engines (NAMI) – according to Russian President Vladimir Putin’s limousine manufacturer Aras Sanet. Automotive News Europe. A symbolic transaction will cost one ruble (6 cents).
The former Moscow Moscow plant – also owned by Renault – will be sent to the city government, Russia’s Commerce Ministry said. Renault and its main stakeholder, the French government, both declined to comment on the deal, the first Russian news agency reported, citing Commerce Minister Denis Manturov.
The ministry added that the deal was needed because Renault could not continue its Russian operations. The company, said to be the largest investor in Western markets in the local market, initially suspended production in Moscow due to logistical problems but resumed operations a month later. Guardian Reportedly, on March 23, Renault announced that it would shut down the Moscow plant for the second time and “evaluate” its options for AvtoVAZ shares.
Renault retains the right to buy back its AvtoVAZ stock in five to six years, although Manturov suggested that the company would spend more than a single ruble to sell it, reportedly. Interfax. “If we invest in this period, it will be considered in terms of cost. There will be no gifts, ”he said.
The company first bought a 25% stake in AvtoVAZ in 2008 for over US $ 1 billion (RM4.3 billion). It has gradually increased its shareholding over the years, fully integrating Russia’s largest carmaker into its balance sheet by 2017. The following year, Renault – along with another state-owned company – bought a 100% stake in defense conglomerate Rostec and acquired AvtoVAZ.
It was only in 2021, as part of the release of its Renaulution Strategy, that Renault announced that it planned to merge Lada into a single business unit with its other budget brand, Dacia. Last month, its Russian operations saw its revenue fall 15.7% in the first quarter, AvtoVAZ lost 23.1%. Poor performance, a direct result of the Ukraine invasion, contributed to a 2.2% decline in Renault’s overall revenue over the same period last year.