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23 Mar, 2022 21:36

French carmaker retreats from Russia

Renault suspends production at its Moscow plant after a Ukrainian pressure campaign
French carmaker retreats from Russia

French auto-maker Renault announced on Wednesday that it was pausing operations at its Moscow factory and exploring options for selling its majority stake in the Russia-based AvtoVAZ conglomerate.

The move comes after Ukrainian President Volodymyr Zelensky mentioned the company by name in a speech to French lawmakers, calling on them to support Kiev.

Earlier in the day, Zelensky addressed the parliament in Paris via video-link and demanded that French companies “must quit the Russian market” and stop financing what he called the “Russian war machine.” He specifically named Renault among the examples.

Zelensky’s foreign minister, Dmitry Kuleba, then called for “customers and businesses around the globe to boycott Group Renault,” accusing the company of supporting “a brutal war of aggression in Europe.”

Within hours, the car-maker, based in the Paris suburb of Boulogne-Billancourt, announced the suspension of operations at the Moscow plant. The French government owns a 15% stake in Renault. In addition to halting production, the group also said it was exploring the ways to sell its stake in the biggest Russian automaker, AvtoVAZ.

Renault owns almost 67% of AvtoVAZ, having bought out stakes held by Nissan in 2017 and General Motors in 2019. The company had initially suspended operations at its Moscow plant at the start of the conflict, but had resumed production since.

Another French company named by Zelensky, home improvement chain Adeo, said it would not close its operations in Russia because that would be considered a premeditated bankruptcy and could open its assets up to expropriation, which would only strengthen the government in Moscow. The company said it had “suspended new investments” in Russia at the start of the conflict.

Russian President Vladimir Putin on Tuesday thanked the foreign companies that continued working in the country “despite the brazen pressure from the US and its vassals. They are sure to find additional opportunities for growth in the future,” he added.

Moscow sent troops into Ukraine in late February, following a seven-year standoff over Kiev’s failure to implement the terms of the Minsk agreements and end the conflict with the breakaway regions of Donetsk and Lugansk. Russia ended up recognizing the two as independent states, at which point they asked for military aid.

Russia demands that Ukraine officially declare itself a neutral country that will never join the US-led NATO military bloc. Kiev insists the Russian offensive was completely unprovoked and has denied claims it was planning to retake the two Donbass republics by force.