Renault took a significant turn, and suspended production at its Moscow plant, just a day after reopening the facility.
In response, the Russian Ministry of Industry and Trade, told Reuters it will “discuss the development prospects of the Renault Russia plant with the Moscow authorities” and “joint solutions will be announced by the end of next week”.
The ministry said it was contacting local Renault management about the situation. The ruling United Russia party has threatened to nationalize the assets of foreign companies that withdrew from the country due to the invasion of Ukraine.
Vehicles produced at the Renault plant in Moscow include the Renault Kaptur and Arkana, and the Dacia Duster.
Renault also controls more than 65% of AvtoVAZ, the parent company of Lada brand, operates two factories in Russia.
Overnight AvtoVAZ said it will extend the three-week summer break to early April and use this time to work with Russian federal and local authorities to restore supply chains and replace “a important imported components with alternative solutions”.
Lada said it is working on a number of “special versions” of some of its models “with reduced exposure to imported components” and that they will be introduced “in the coming months”. .
As for Renault’s stake in AvtoVAZ, the company said it was “assessing available options”. Without mentioning the war, Renault said it would take into account “the current environment” and wanted to act “responsibly towards its 45,000 employees in Russia”.
While other global automakers, including Volkswagen, Toyota, Hyundai and Ford, were quick to stop production in Russia, Renault was more cautious.
The French carmaker’s reluctance to suspend operations in Russia following the invasion of Ukraine has led to pressure and condemnation.
Most notably, Volodymyr Zelenskyy, the president of Ukraine, told the French parliament earlier this week Renault and other French companies should “stop funding the Russian war machine”.
Renault’s reluctance to pull out of Russia after the start of the most recent war in Ukraine is due to Russia’s relative size and importance to the French automaker’s production and business footprint, as well as its their big investment in this country.
To complicate matters further, the French government owns a 15% stake in Renault.
Last year, the company sold 385,000 Lada vehicles globally, accounting for 14.3% of the total production of the Renault Group.
Both Renault and Lada have a strong presence in Russia and the former Soviet republics. In Russia, Lada’s market share is 21% in 2021. Add Renault’s numbers to the mix, and the company is responsible for about 30% of new cars sold in the country last year.
As part of Renaulation Plan announced in early 2021, Lada and Dacia are brought together in one organizational structure.
This reorganization has called for Dacia to move into luxury with larger vehicles, with Lada picking up some of the shortfalls with at least four new low-cost models based on the Renault Alliance’s CMF-B platform- Nissan-Mitsubishi, including a replacement for the iconic, but aging, Niva off-roader.
