Renault Russia got nationalized by the Russian government. It has taken ownership of 100 percent of Renault Russia’s shares, while Renault’s 67,69% interest in Avtovaz will be sold to NAMI, a government-funded research center, according to a press release.
Why did Renault Russia get nationalized?
Russia has nationalized a major factory that belonged to Renault and intends to use it to revive the famous Soviet-era Moskvitch car in what the French automaker categorized as a “responsible choice” for its thousands of employees in Russia. The move appears to be the first major transfer of private assets into state hands after Russian officials threatened to nationalize Western businesses exiting over Moscow’s military intervention in Ukraine.
At its factories, Avtovaz will continue to put together the complete product range of Lada cars, and the automaker will offer Renault car maintenance services on the Russian market. The purchase included a six-year option to acquire back Renault’s stake in Avtovaz.
“By transferring Group Renault’s stake to state ownership [Russia] would be able to maintain its control of Avtovaz and ensure the company’s operability amid sanctions,” the press service quoted Russian Minister of Industry and Trade Denis Manturov as saying. The move would allow the firm to maintain its key competencies, manufacturing cycle, and preserve employment, he added.