French carmaker announced suspension of activities at its Moscow plant from March 23 with Russian authorities now considering alternative uses for the facility.
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Renault was the latest in a line of global automakers to announce suspension of operations in Russia in the backdrop of the invasion of Ukraine. The carmaker’s announcement came following mounting pressure and criticism from Ukraine over its continued operations in Russia – a market where the Renault Groupe controls about a third of the market retailing models under the Renault and Lada brands. Along with the suspension the company also announced a revised financial outlook for 2022 announcing revised a operating margin and a ‘positive’ automotive operation free cash flow.
Renault’s operations in Russia accounted for 20 percent of the Groupe’s total volumes in 2021.
The carmaker also said that it is assessing all options for Russian firm Avtovaz in which it holds a controlling stake. Avtovaz manufactures several Renault and Lada models for the Russian market with the company recently having announced a partial halt to operations due to imported parts shortages. The company is reportedly working on a workaround for continued operations without requiring imported components.
Reuters reports that the future of Renault’s plant in Russia could also be in doubt. Russia’s Ministry of Industry and Trade said that they could decide an alternative use for the facility by end of next week going in line by a previous suggestion that the state could nationalise assets of foreign firms leaving the country.
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Several carmakers have suspended operations in Russia in the past month with the list including names such as Ford, Volvo, Toyota, General Motors, BMW, Jaguar Land Rover, Mercedes Benz and the Volkswagen Group. Overall, as many as 400 companies (including non-auto) have withdrawn from Russia since the start of the Ukraine conflict on Feb 24 and the announcement of further sanctions against the country.
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