What will Renault do in Russia
Renault has announced the sale of its shares in AvtoVaz and Renault Russia. All the details (and buyback option)
French carmaker Renault today announced the sale of its majority stake in AvtoVAZ, the Russian vehicle manufacturer that owns the Lada brand.
POSSIBILITY OF REPURCHASE OF AVTOVAZ
The stake amounts to 67.6 percent and will be sold to NAMI, the Russian state institute for automobile and engine research and development. The transaction provides for an option to buy back the shares in six years.
Renault is the European carmaker most exposed to the Russian market, from which many companies – over four hundred, mainly Western – are withdrawing after the Kremlin ordered the invasion of Ukraine and the European Union, the United States and other governments have imposed penalties for retaliation.
THE SALE OF RENAULT RUSSIA
In addition, the entirety of Renault's shares in Renault Russia (the group's wholly-owned local division) will go to the authorities of the city of Moscow.
In a statement, Renault said the closing of these transactions is not subject to conditions and that all necessary approvals have been obtained.
THE WORDS OF AD DE MEO
Chief Executive Officer Luca de Meo spoke of a “difficult but necessary” decision for the company: “we are making a responsible choice towards our 45,000 employees in Russia”. He added that the operation allows the group's performance to be maintained and guarantees the possibility of returning to Russia in the future and in a different context.
In March, Renault announced the suspension of operations at its Moscow plant due to the pressure received given the war in Ukraine.
NON-CASH WRITE-DOWN OF ALMOST 2.2 BILLION
The company – the French government owns a significant 15 percent stake – confirmed a non-cash write-down of nearly $ 2.2 billion that reflects the possible costs of suspending operations in Russia.
Leaving the country – its second largest market, after Europe – will cost Renault around 10 per cent of its turnover.
HOW THE FIRST QUARTER OF 2022 WENT (BAD)
Last month Renault announced the results for the first quarter of 2022. The vehicles sold were 552 thousand, 17.1 percent less than in the first quarter of 2021. The best performing car in Europe, in terms of volumes sold, is was the Dacia Sandero. Revenues amounted to € 9.7 billion, down 2.7 percent year-on-year.
The revenues of Renault Russia and AvtoVAZ were 900 million euros, 15.7 percent less on an annual basis: more specifically, AvtoVAZ contributed 527 million euros (-23.1 percent) and Renault Russia for 367 million (-2.1 percent).
Excluding the activities of AvtoVAZ and Renault Russia, the group's revenues in the first quarter of 2022 were 8.9 billion, 1.1 percent less than in the same period of 2021.
FORECASTS FOR THE REST OF THE YEAR
Due to the semiconductor crisis, Renault expects a production loss of 300,000 vehicles in the whole of 2022, especially in the first half of the year.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/renault-russia/ on Mon, 16 May 2022 10:03:39 +0000.