The French carmaker Renault said on Wednesday that it was halting operations at a plant in Moscow and was reassessing its partnership with AvtoVAZ, Russia’s largest auto manufacturer.
Renault owns 68 percent of AvtoVAZ, the maker of Lada vehicles, and has relied on Russia for about 18 percent of its global vehicle sales.
“Regarding its stake in AvtoVAZ, Renault Group is assessing the available options, taking into account the current environment, while acting responsibly towards its 45,000 employees in Russia,” the company said in a statement. “Renault Group reminds that it already implements the necessary measures to comply with international sanctions.”
The company also revised its financial outlook for 2022, saying it now expects an operating profit margin of 3 percent, down from a previous forecast of more than 4 percent.
Several other automakers have ceased operations in Russia in response to its invasion of Ukraine and international economic sanctions that have greatly curtailed trade with the country.
Volkswagen has idled two Russian plants. Ford Motor and Stellantis have stopped production at Russian plants they own with other automakers. Those and other automakers have also halted exports of cars and parts to Russia.
Renault sold more than 482,000 vehicles in Russia last year, more than any other Western automaker. Last week it halted production at two other AvtoVAZ plants, in Togliatti and Izhevsk, because of parts shortages. Those plants are several hundred miles east of Moscow.
Renault acquired a 25 percent stake in AvtoVAZ in 2008, when Russia was thought to have great potential for automakers, along with China, Brazil and India. But only the China market has taken off as expected, and Russia was slowed in particular by Western sanctions imposed after it annexed Ukraine’s Crimea region in 2014.
Since the annexation, some automakers have scaled back their operations in Russia. General Motors pulled out of a joint venture with AvtoVAZ in 2019, ending its presence in Russia.
Renault was one of the few that continued investing there. It bought Nissan’s stake in AvtoVAZ in 2017 and consolidated the Russian unit into its global operations.
Source: NY Times