The French carmaker Renault stated on Wednesday that it was halting operations at a plant in Moscow and was reassessing its partnership with AvtoVAZ, Russia’s largest auto producer.
Renault owns 68 p.c of AvtoVAZ, the maker of Lada automobiles, and has relied on Russia for about 18 p.c of its world automobile gross sales.
“Relating to its stake in AvtoVAZ, Renault Group is assessing the out there choices, making an allowance for the present setting, whereas appearing responsibly in the direction of its 45,000 staff in Russia,” the corporate said in a statement. “Renault Group reminds that it already implements the mandatory measures to adjust to worldwide sanctions.”
The corporate additionally revised its monetary outlook for 2022, saying it now expects an working revenue margin of three p.c, down from a earlier forecast of greater than 4 p.c.
A number of different automakers have ceased operations in Russia in response to its invasion of Ukraine and worldwide financial sanctions which have drastically curtailed commerce with the nation.
Volkswagen has idled two Russian crops. Ford Motor and Stellantis have stopped manufacturing at Russian crops they personal with different automakers. These and different automakers have additionally halted exports of automobiles and components to Russia.
Renault bought greater than 482,000 automobiles in Russia final yr, greater than every other Western automaker. Final week it halted manufacturing at two different AvtoVAZ crops, in Togliatti and Izhevsk, due to components shortages. These crops are a number of hundred miles east of Moscow.
Renault acquired a 25 p.c stake in AvtoVAZ in 2008, when Russia was thought to have nice potential for automakers, together with China, Brazil and India. However solely China’s market has taken off as anticipated, and Russia was slowed particularly by Western sanctions imposed after it annexed Ukraine’s Crimea area in 2014.
For the reason that annexation, some automakers have scaled again their operations in Russia. Basic Motors pulled out of a three way partnership with AvtoVAZ in 2019, ending its presence in Russia.
Renault was one of many few that continued investing there. It purchased Nissan’s stake in AvtoVAZ in 2017 and consolidated the Russian unit into its world operations.