"Save the production cycle and jobs": the assets of the Renault group in Russia become state property

The Russian assets of the Renault group are transferred to state ownership.

This was announced on Monday, May 16, in the Ministry of Industry and Trade of the country.

According to the signed agreement, the full package of shares in CJSC Renault Russia will be transferred to the Moscow government.

In the meantime, 67.69% of AvtoVAZ shares will become the property of the state represented by FSUE NAMI, while the remaining securities of the concern will remain with the state corporation Rostec.

“The transfer of a share of the Renault Group to the state will ensure the preservation of AvtoVAZ’s manageability and the possibility of continuing the operation of the enterprise in the face of sanctions restrictions.

This is how we will preserve key competencies, the production cycle and jobs,” said Denis Manturov, head of the Ministry of Industry and Trade.

The total volume of Renault's Russian assets is estimated at about €2.2 billion. At the same time, as Manturov noted at the end of April, the transfer of the French concern's share in AvtoVAZ was "a conditional deal for the ruble."

However, as emphasized in the Ministry of Industry and Trade, an important condition of the agreement is an option for Renault to buy back its stake, which can be exercised over the next six years.

Thus, we are not talking about the irrevocable and free nationalization of the property of a foreign company, Mark Goykhman, chief economist at the TeleTrade information and analytical center, said in an interview with RT.

“Neither side is burning bridges.

Renault has the right to get back its assets within six years, and its place in the market remains potentially with it.

At the same time, in the case of additional investments from the Russian side, they must be compensated by Renault itself when it returns to the country,” Goykhman explained.

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Within the framework of existing licenses, AvtoVAZ plants will continue to produce the entire line of LADA cars, the Ministry of Industry and Trade noted.

Moreover, the Russian automaker will carry out maintenance of Renault cars on the Russian market.

“Due to the large share of imported components in Russia, most likely, such brands as Niva will be produced more.

At the same time, Renault cars will continue to receive maintenance and repairs at the expense of spare parts that will be imported to Russia under the parallel import program.

This will partially solve the problem of the shortage of components, ”Artyom Deev, head of the AMarkets analytical department, suggested in a conversation with RT.

At the end of March, the Russian government decided to legalize parallel imports against the backdrop of Western sanctions.

We are talking about importing foreign products into the country without the consent of the copyright holders.

As explained in the Cabinet, in the face of external restrictions, such a measure will help to provide the domestic market with demanded goods and will help stabilize prices for them.

The revival of "Moskvich"

Recall that since the end of February 2022, the European Union, the United States and a number of other states continue to impose new sanctions against Russia.

This is how the West reacts to the conduct of a military special operation in Ukraine.

In total, almost 10.4 thousand restrictions have already been imposed on Moscow (7.6 thousand of them since the end of February), as evidenced by the materials of the Castellum.AI global sanctions tracking database.

Restrictions, in particular, affected the banking industry, the energy sector, aviation and trade.

At the same time, almost half of the country's gold and foreign exchange reserves (worth $300 billion) were frozen, and many Western companies announced their withdrawal from the Russian Federation.

So, on March 23, Renault announced the adoption of measures to comply with international sanctions and suspended the activities of its plant in Moscow.

However, now the enterprise will become the property of the Russian capital and will start working again.

This was announced on Monday by the mayor of the city Sergei Sobyanin.

“The foreign owner has decided to close the Renault Moscow plant.

This is his right, but we cannot allow thousands of workers to be left without work.

Therefore, I decided to take the plant to the balance of the city and resume the production of cars under the historical Moskvich brand, ”Sobyanin wrote in his blog.

According to him, the city authorities will try to keep the bulk of the staff working at the enterprise and its subcontractors.

At the same time, KamAZ will become the main technological partner of the revived Moscow Automobile Plant Moskvich, Sobyanin noted.

“At the first stage, the production of classic cars with an internal combustion engine will be organized, and in the future, electric cars.

In addition, together with KamAZ and the Ministry of Industry and Trade of Russia, we are working on localizing the production of the maximum number of auto components in Russia,” the Moscow Mayor added.

In general, experts interviewed by RT positively assess the transfer of Renault assets to Russian structures.

According to them, under the conditions of sanctions, the initiative brings certainty to the issues of the further functioning of the country's auto industry.

“The positive thing is precisely that the production facilities themselves are preserved - and this is already a lot.

Jobs remain in the production of fairly demanded equipment, and new cars of domestic assembly will continue to enter the market, that is, to some extent, the formed niches of consumer demand will be filled, ”concluded Mark Goykhman.