Renault Leaves Russia; Sells Shares to Moscow’s Government

French automaker Renault is selling its shares in Russia to the Russian Federation and the government of Moscow. It is also selling its 67.69 percent stake of AVTOVAZ, a Russian automobile manufacturing company, to the Central Research and Development Automobile and Engine Institute. During the next six months, Renault has the option of buying back its interest in AVTOVAZ.

"We are making a responsible choice towards our 45,000 employees in Russia, while preserving the Group's performance and our ability to return to the country in the future, in a different context. I am confident in the Renault Group's ability to further accelerate its transformation and exceed its mid-term targets," said Luca de Meo, CEO, Renault Group.

As the closing of the plant would leave a high number of people without jobs, Moscow will repurpose the facility to manufacture the Moskvitch brand, which was a Soviet automobile brand that disappeared in 2000. About 200,000 Moskvitch vehicles are still registered in Russia.

“The foreign owner decided to close the Moscow Renault plant. This is his right, but we cannot allow thousands of workers to be left without work. Therefore, I decided to take the plant to the balance of the city and resume the production of cars under the historical Moskvitch brand,” said Moscow’s mayor, Sergei Sobyanin.

Sobyanin added that the plant would first manufacture ICE vehicles and will later transition to producing EVs. Last year, Moscow shared its plans to invest in charging stations to boost electromobility. In July 2021, there were about 200 EVs in Moscow and the number was increasing, said Maxim Liksutov, Head of Moscow’s transport department. As of 2018, Russia was accountable for the production of 11.12 metric tons of CO2 per capita.

Renault is currently present in over 130 countries including Mexico. Although the international context has affected OEM’s expansion in Mexico, Renault’s supply diversity has allowed it to continue its operations as usual. “Fortunately, we import from different countries in Latin America, including Brazil, Argentina and Colombia. South Korea and the EU are also sources. However, we are very conservative regarding the opening of new stores. We like to ensure our dealerships see a return on investment,” said Magdalena López, CEO, Renault Mexico, to MBN.

Renault Mexico experienced continuous growth during the past five years and enjoys a customer satisfaction rating of 90 percent, according to the company. Renault closed 2021 with 3.5 percent of the Mexican market and it aims to reach 5 percent in the future.