Renault will sell its 68 percent stake in Russia’s largest automaker Avtovaz for the symbolic price of one ruble (currently equivalent to 1.3 euro cents) to the Russian state scientific institute NAMI. Probably not entirely voluntarily. Renault recently estimated the value of the stake at 2.2 billion euros.
The Russian Ministry of Commerce also announced on Wednesday that the Renault plant in Moscow, which manufactures Renault and Nissan cars, will be handed over to the city government – the first case of state expropriation of Western industrial companies in the current war situation The ministry acknowledged the possibility of buying back the Lada manufacturer Avtovaz within five or six years. “But if we make investments during this time, then the price will take them into account. There will be no gifts there,” Interfax news agency quoted Trade Minister Denis Manturov as saying. The French carmaker and the French government, which owns a 15 percent stake in Renault, declined to comment. Russian news agencies reported on the planned transaction for the first time, citing Trade Minister Manturov. Russia is Renault’s second-biggest market when/if the Russian vehicle market will recover,” commented Credit Suisse analysts. Russia is the second largest market after Europe for the Renault Group, which Citibank estimates makes eight percent of its profit in the country. The group stopped operations at its Russian plant last month and announced that it was reviewing options for Avtovaz. The goal for the year was reduced. Weeks ago, Moscow had warned that Western companies would be expropriated and their patents confiscated if Western companies withdrew from Russia. Moscow’s invasion of Ukraine on February 24 had triggered a massive withdrawal of Western companies from Russia. More than 750 companies have announced that they will at least partially restrict operations there, according to the Yale School of Management.
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