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Renault sold its business to Russia, including a controlling stake in Lada, becoming the latest carmaker to leave the country due to its attack on Ukraine.
In a statement on Monday, the French company said it had agreed to sell Renault Russia in the city of Moscow and its stake of nearly 68% to Lada parent Avtovaz in an industry research center. owned by the state.
Renault remains open to the option of returning to Russia – the deal gives the company various windows to buy back its interest in Avtovaz over the next six years, the company added.
“Today, we have made a difficult but necessary decision; and we have made a responsible choice of our 45,000 employees in Russia, while preserving the Group’s performance and our ability to return to the country in the future, in a different context, ”said Renault CEO Luca de Meo in the statement.
Renault announced on March 23 that it would suspend its Moscow plant activities and charge nearly 2.2 billion euros ($ 2.3 billion) to write the value of Russia’s business to zero.
Avtovaz’s Lada brand will represent almost 21% of the Russian market in 2021.
Western auto makers, along with other multinational companies, ran for exit following Russian President Vladimir Putin’s decision to invade Ukraine in February. Toyota (TM) and Volkswagen (VLKAF) were among a raft of companies that announced in early March that they had halted production and halted exports to the country.
Prior to Renault’s announcement later this month, the company was one of the few French businesses that Ukrainian President Volodymyr Zelensky had called for to resume their operations in Russia. Ukrainian Foreign Minister Dmytro Kuleba continued, calling for a global boycott of the carmaker.
Russia’s car sales have declined since the invasion, hit by Western sanctions and the exodus of foreign companies. Only 55,000 new cars and light commercial vehicles were sold in March, down 63% from the same month last year.
Lada – an icon of Soviet -era self -reliance – could, in theory, benefit from the loss of foreign competition. But it depends heavily on imported parts.
The company took a company-wide summer vacation in April, and announced it would move to a four-day work week in three months. starting in June to try to save more than 40,000 jobs. It also said it will design new Lada models to be less reliant on imports.
The company did not detail which models will be affected, but said it will gradually become available in the coming months.
Evgeny Eskov, editor-in-chief of Russian auto industry journal Auto Business Review, told CNN Business last month that the redesigned models will be simpler versions of existing cars, which no additional features like ABS.
“Brutal cars from the past,” he wrote in an email to CNN Business.
-— Clare Sebastian, Anna Cooban and Xiaofei Xu contributed to this article.