Under pressure Renault finally gave in. The most exposed automaker to Russia announced on Wednesday March 23 that it would suspend production at its Moscow plant with immediate effect and reflect on the future of its controlling stake in Russia’s leading automaker AvtoVAZ.
If he had never officially communicated before Wednesday evening on his prospects in Russia since the offensive in Ukraine, Renault was carefully monitoring criticism of the resumption of production at its Moscow plant which produces SUVs Duster, Captur, Arkana and Nissan Terrano this week, and AvtoVAZ plants the previous week.
The pressure escalated on Wednesday, when Ukrainian President Volodymyr Zelensky called on French companies to leave Russia and stop being the “war sponsors”, citing Auchan, Leroy-Merlin and Renault. Ukrainian Foreign Minister Dmytro Kuleba immediately called for a global boycott of the French automaker. After Renault’s announcement, he welcomed the manufacturer’s statementevoking a “responsible action in the context of Russia’s ongoing barbaric aggression against Ukraine”.
Renault refuses to pull out of Russia. Not that it should surprise anyone when Renault supports a brutal war of agg… https://t.co/38R8f8fqps
In its press release, Renault “recalls that it is already implementing the necessary measures to respect international sanctions”. Whatever it decides for its long-term presence in Russia, the group already anticipates that it will cost it.
“As a result, Renault Group is forced to review its financial outlook for 2022”he warned, predicting a decline in operating margin “around 3%”against more than 4% previously forecast.
It also now forecasts free cash flow only “positive” for his activity “car”while he relied on “more than a billion euros previously”.
In anticipation, Renault plans to record an adjustment charge of 2.195 billion euros in its accounts for the first half, i.e. the value of its assets in Russia.