Russia nationalizes Renault plant to bring back Soviet-era Moskvitch

Russia nationalizes Renault plant to bring back Soviet-era Moskvitch

by Sakina Raj

The Russian Government has reportedly nationalized a Renault factory in Moscow and plans to use it for reviving the famous Soviet-era Moskvitch automotive brand, with the French automaker calling the move a responsible choice for its Russian employees.

This is the first major instance of a transfer of private assets to the Russian state after the government threatened to nationalize Western firms that exited the country over its invasion of Ukraine.

Sergei Sobyanin, Mayor of Moscow, announced that he has decided to list the Renault factory as an asset of the city and resume vehicle production under the historical brand name of Moskvitch, opening a new page in the brand’s history in 2022.

Sobyanin also vowed to retain most of the staff and subcontractors that were already working in the plant.

In its statement, Renault described the sale of its majority stake in Russian automaker, Avtovaz, to the state-backed automotive research center NAMI and all its shares in Renault Russia to Moscow city as a ‘responsible choice’.

Luca de Meo, CEO of Renault, stated that the company undertook a difficult yet necessary decision and is making a responsible choice for its 45,000 employees in Russia.

de Meo added that the move preserves the automaker’s performance and ability to return to the country under a different circumstance in the future.

The company confirmed a non-cash write-down of approximately $2.29 billion which covers the costs of halting operations in the country.

The Russian Industry and Trade Ministry stated that Renault’s 68% stake in Avtovaz will be transferred to NAMI and that the automaker will have the option to buy its stake back within the next 6 years. However, it has not indicated whether the same will be available for its nationalized plant.

Moskvitch is an iconic Soviet automotive brand that ran on the streets of the Soviet Union for 75 years. In 2002, the automobile company filed for bankruptcy and ceased production due to the financial crisis that followed the Soviet Union’s dissolution.

Source credit: https://www.themoscowtimes.com/2022/05/16/russia-to-nationalize-renault-plant-revive-soviet-era-moskvitch-car-after-handover-a77685

Sakina Raj

Armed with a degree in English Literature, Sakina chose to explore the world of content writing and pursue it as a career. Sakina has been playing with words for over five years now and currently pens down articles for Marketprimes and various other online portals relating to diverse domains. Whe Read more...