French automaker Renault announced on the 23rd (local time) that it would suspend operations at its Moscow plant due to Russia’s invasion of Ukraine.
Renault said in a statement that from today on, production at the Moscow plant will be suspended.
Renault previously temporarily stopped operating its Moscow plant last month and then restarted it.
According to the company, the value of the Moscow plant’s assets reached 2.2 billion euros as of last year.
Renault, who is also the largest shareholder of AVTOVAZ, which produces the Russian national car Lada brand, said it is considering possible ways to operate AVTOVAZ.
Renault holds a 69% stake in AVTOVAZ.
Renault said, “Regarding its stake in AVTOVAZ, Renault Group is assessing the available options, taking into account the current environment, while acting responsibly towards its 45,000 employees in Russia.”
Renault’s move comes after the Ukrainian government urged a boycott of Renault after Renault showed a passive attitude despite a series of withdrawal of global companies from Russia’s invasion of Ukraine.
Just before Renault’s announcement, Ukrainian Foreign Minister Dmytro Kuleba posted on Twitter asking for a boycott of Renault, saying, “Renault refuses to pull out of Russia. Not that it should surprise anyone when Renault supports a brutal war of aggression in Europe. But mistakes must come with a price, especially when repeated. I call on customers and businesses around the globe to boycott Group Renault.”
The French government has said it must decide on its own whether companies will suspend operations in Russia.
Renault has been investing in Russia, an emerging market, as a promising automobile market for more than 20 years.
In addition, Renault lowered the group’s operating profit ratio from more than 4 percent to around 3 percent this year.
According to Citibank, 8% of Renault’s core profits come from Russia. Most of them are earnings from Avtovaz shares.
