Russia is Renault’s second-biggest market, and it’s paying a heavy price for a $1bn deal sealed in 2007 with a top ally of Vladimir Putin
Volkswagen, BMW and Toyota have idled Russian plants and suspended shipments to the country as part of a broader retreat by global corporate giants. The one vehicle maker with the most to lose, Renault, has remained conspicuously silent.
“It would be perfectly legitimate for Renault to consider an exit from AvtoVaz,” said Jefferies analyst Philippe Houchois. “Renault could take the loss, but an exit would be a tough decision.” “Renault has promised to abide by sanctions,” Gabriel Attal, the French government spokesperson, said Thursday on France Info radio. A spokesperson for AvtoVaz declined to comment beyond operational issues. Renault continues to monitor the situation, according to a spokesperson.
“When we decided to move into Russia and make this alliance with AvtoVaz everything was fine,” Ghosn said Thursday in an interview with Bloomberg TV. “It made a lot of sense.” AvtoVaz’s reliance on the domestic market means a deep economic slump would spell trouble. “Historically, during times of recession in Russia AvtoVaz has been heavily loss making,” Coldicott said.
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