LONDON – Renault CEO Luca de Meo stated the automaker will determine within the coming weeks on the way forward for its operations in Russia, the place it suspended operations in March following the invasion of Ukraine.
“Negotiations are nonetheless ongoing,” CEO Luca de Meo stated on the FT Way forward for the Automotive 2022 convention on Monday, including that leaving Russia fully entails writing down the worth of its belongings. “However we additionally know that we have been working for 10 years investing some huge cash there so we’re additionally right here to guard our belongings and what we have finished.”
In late April, Russia stated Renault would switch its 68 p.c stake in Russia’s greatest carmaker AvtoVAZ, which makes the Lada model, to an auto analysis institute for one symbolic ruble. Renault has not commented on that report.
The remaining 32 p.c of Avtovaz is held by Russian protection conglomerate Rostec.
Russia is Renault Group’s second-largest market exterior of France. Lada has greater than 20 p.c of the market, and de Meo had deliberate to mix the model with Romanian model Dacia to share platforms and improvement prices.
Regardless that Russia accounted for a big portion of Renault’s income final 12 months, de Meo stated the income stream was not integral to the group’s funds as a result of a lot of it was used to service Avtovaz’s debt. The Russian automaker was deeply unprofitable till 2018, after Renault absolutely built-in it into its stability sheet.
“It is not going to have a big impact on our potential to finance different tasks,” de Meo stated.
Renault says it has invested about 2 billion euros in AvtoVAZ within the final decade, together with upgrading the massive Togliatti manufacturing facility.
De Meo stated Monday that Renault was looking for a option to protect jobs for its workers in Russia. He characterised the choice in late March to go away Russia as “painful” however stated there have been extra necessary points proper now than company income.
“We clearly have a accountability to our 45,000 workers in Russia,” he stated. “So we’re an answer that can permit them to maintain a job into the long run.”
Reuters contributed to this report