Twelve lines. This is the length of the press release issued by the Renault group at the end of the meeting of the Board of Directors which resolved to suspend industrial activities in Russia with immediate effect. There is a reference to production at the site near Moscow, where the group assembles models such as the Captur, Arkana and Duster (marketed in Russia under the Renault brand) and the Nissan Terrano.
The reasons for the provision are not mentioned in the lapidary note, even if the transalpine company which has the Italian Luca De Meo as CEO then specified “that it is already implementing the necessary measures to comply with international sanctions”. There are no references to war, invasion or Ukraine in the statement released yesterday evening.
Cars, houses stop exports to Russia. Production in hiccups in Europe due to the shortage of cabling systems
The pressure on the group and, more generally, on other French brands has evidently become too strong. During his video link to the National Assembly, Ukrainian President Volodimir Zelenski quoted Renault, Auchan and Leroy Merlin: “They must stop sponsoring the Russian war machine, they must stop financing the murder of children and rape of women “. “French companies must leave the Russian market,” was his exhortation. British Labor Party exponent Chris Bryant, who also stood out for his fight for sanctions against Chelsea-owned Russian oligarch Roman Abramovich, had even envisaged a boycott of Renault in the UK.
Zelensky: “Renault and other companies stop sponsoring Russia”
The transalpine group is the most exposed in Russia: according to Citibank, cited by Automotive News, it would generate 8% of the revenues linked to its main activity in the country: the overall market share of the Alliance brands exceeds 30%. In addition to the suspension of activities in the factory near Moscow, the Board informed that “it is evaluating possible options on its participation in Avtovaz, acting responsibly towards the 45,000 employees in Russia”. Avtovaz, the country’s largest carmaker, is controlled by the Moscow-based Lada Auto Holding joint venture between the public company Rostec (32.3%) and the group (66.7%). Vladimir Putin has threatened Western companies with nationalization and the Prosecutor’s Office of the capital has opened an investigation into the possible infringement of workers’ rights by foreign companies. What are the “possible options” is not known, also because in recent days Renault had announced the resumption of production in Russia after an initial stop due to the shortage of components.
The suspension will have repercussions on margins: the note reports a downward revision, from an estimated 4% to 3%.