France's Renault Withdraws from Russia... "To Sell Local Stake"

by Kim Minyoung

Published 27 Apr.2022 19:42(KST)

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] Due to the aftermath of the Ukraine crisis, French automobile company Renault has decided to sell its shares in subsidiaries in Russia and withdraw, local media reported.

On the 26th (local time), according to TASS news agency and others, Denis Manturov, Russia's Minister of Industry and Trade, announced that Renault agreed to transfer 68% of its shares in the automobile company Avtovaz to NAMI, the Russian state automobile research institute.

Avtovaz is majority-owned by Renault and produces the Russian national car brand "Lada."

Minister Manturov also stated that Renault plans to transfer the Moscow factory "Renault Rossiya," which it owns 100%, to the Moscow city government. He explained that in the case of Avtovaz, there is an option for Renault to repurchase the shares if it decides to return to Russia in 5 to 6 years.

Manturov said, "Purchasing or nationalization is not our plan, but if companies cannot find ways to procure parts, we have no choice but to find alternatives," adding, "This applies to all (foreign) automobile companies that are delaying decisions."

Locally, there are concerns that Renault's withdrawal could affect other foreign companies such as Hyundai Motor, which suspended operations at its Saint Petersburg factory, Russia's second-largest city, from the 1st of last month due to parts procurement difficulties.