The Volkswagen Group designed an escape route Russiafollowing in the footsteps of Renault, Ford and Mercedes Benz.
In a statement released late last week, Volkswagen said it had received approval from the Russian government for the sale of “the production facility in Kaluga, the import structure (distribution and after-sales business) as well as the warehousing and financial services operations with all relevant employees. ” for a company called Art-Finance, which is backed by Avilon, a network of Russian car dealers.
While many of its rivals have sold their businesses to local investors for a single ruble ($0.02), despite buy-back terms, the sources said. Reuters Art-Finance and Avilon paid 125 million euros ($203 million) for Volkswagen assets in Russia.
It is not clear whether the Volkswagen sale includes a buyback clause, nor do we know what vehicles Art-Finance intends to manufacture and distribute.
At its peak, Volkswagen’s Kaluga plant had an annual production capacity of 225,000 cars and employed more than 4000 people.
It has produced several vehicles for the Volkswagen and Skoda brands, including a unique Polo liftback based on the Skoda Rapid.
The plant has been largely idle since March 2022, not long after Russia invaded Ukraine. Russia was subsequently sanctioned and cut off from the global banking system, disrupting vital supply chains and limiting demand.
In addition to the Kaluga, Volkswagen Group vehicles are also produced in Nizhny Novgorod at a plant operated by the local automaker GAZ. The German automaker has suspended production contracts in Nizhny Novgorod after the Russian invasion.
Lada – formerly owned by Renault, but now part of Russia’s Central Motor and Automotive Research and Development Institute (NAMI) – has managed to restart production in mid-2022but it must remove features, such as airbags, infotainment, ABS and air conditioning.
With new local production at a fraction of what it was in the pre-war days, reports show Russians are turning to new Chinese cars, as well as used imports. .