According to Russian press agencies and Reuters, Renault will sell its stake in local partner AvtoVaz for one symbolic rouble, with the option of repurchasing it later. The deal includes the French carmaker’s factory in the outskirts of Moscow, where models from Renault and Dacia are built.
The Russian minister for commerce and industry, Denis Manturov, revealed the transaction. “It is very likely that our central institution NAMI will acquire the assets,” he said. Renault is practically giving away its Russian activities with one rouble as the symbolic price for the deal.
The minister did acknowledge that the French would be entitled to repurchase their share within a time frame of “5 to 6 years”, only specifying that the possible investments made in the meantime by NAMI and the other shareholder, Rostec, will be accounted for in the deal. “There won’t be any presents here,” Manturov added.
NAMI is the acronym for the Russian scientific institute for research on automobiles and engines. Rostec is a conglomerate of many companies, most of them linked to defense. It is run by a close Putin ally, Sergey Chemezov.
Renault declined to react to the comments by Mantourov. But during the presentation of the financial result of the first quarter, its financial director Thierry Pièton had said about the exit strategy from Russia that “talks were ongoing and progressing”.
Losing its 68% stake in AvtoVaz, and its industrial presence is undoubtedly a blow for the automaker. Russia is its second-biggest market and accounts for 10% of its revenues. Moreover, Renault was in the wake of launching a range of new Lada products just before the Ukrainian invasion triggered a corporate exodus from Putin’s country.
While Renault initially stayed somewhat aside because it invested billions of euros in AvtoVaz, it soon had to yield under pressure to find a new solution for its Russian assets because it is partly state-owned.
Snatching the AvtoVaz stake for free is one of many examples of how Russia is grabbing hold of Western companies’ local assets. The Russian government is currently working on legislation to force a handover of foreign companies to external management.
Manturov also added that Renault would part from its shares in Avtoframos, the factory it constructed in close collaboration with the city of Moscow. Operations are currently suspended in the plant. Of all Western carmakers, Renault has the most significant exposure to Russia.