Iconic Soviet car brand ‘Moskvich’ to be brought to life in Renault Plant.
Highlights:
- Renault joins a long line of foreign companies to exit Russia
- Mcdonald’s exited the country just last week.
MOSCOW: The French automobile manufacturer has announced that they will cease all Russian operations due to political conditions. The City of Moscow will acquire all assets in the coming days. This includes a 68% stake in soviet-era car maker Avtovaz. NAMI, a science institute will take control of Avtovaz.
The CEO Luca de Meo said that the move is to protect the interests of their 45,000 employees.
Both parties are yet to disclose the value of the settlement, although reports suggest it was for a symbolic “2 Rubles”. Renault reported a 2.2 Billion Euro hit to its value which would nearly zero out the value of its Russian operations. Renault, however, did not completely rule out a return to the market with a possible 6-year return timeframe on the books.
History of Renault in Russia :
Renault first appeared in the Russian car market in the early 20th century during the reign of the Romanov Dynasty. The Renault-Russia joint-stock country officially formed in the year 1916 and began production in Rybinsk. The revolution nationalized the company for the first time in the mid-20th century. During this time period, the USSR developed its own automobile production and development capabilities.
The company returned in the 60s after agreeing to cooperate with the government. By the mid-1980s, 1/4th of all Russian vehicles ran on Renault technology. In 2006, the Renault Logan car became the best-selling foreign car in all of Russia.
The Great Exodus of Russia :
The French auto manufacturer joins the most recent exit of McDonald’s to leave Russian markets. The American fast-food chain put all 850 locations up for sale to a domestic buyer. This is due to Russia’s recent invasion of Ukraine in February.
Many organizations from NATO-allied nations have announced plans or have already begun pulling out of Russia.
President Putin warned in March that western companies who leave the country will have their assets will be impounded or nationalized.
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