The Renault Group has officially announced that it is suspending its industrial activity in Russia. Activities at the Renault production center in Moscow have been suspended and the Group is even evaluating the possibility of divesting itself of its shares in AvtoVAZ.
In recent weeks the Renault Group It has been in the spotlight since it has been one of the great giants of the automotive industry that has tried by all means to avoid temporarily closing its operations in Russia. And it is that, this automobile conglomerate plays an important role in the Russian market through the Renault and Lada brands.
Just a few days ago Renault resumed vehicle production in Russia announcing that it was an indefinite measure. Unfortunately, the joy was short-lived. The French company has changed its mind drastically. The Group Renault has announced that it suspends its industrial activity in Russia. A decision made just a few hours ago by the Renault Group Board of Directors.
The Renault Group analyzes what to do with its participation in AvtoVAZ
The activities of the Renault plant in Moscow have been suspended as of today. Furthermore, and what may be even more important, the Grupo Renault is currently evaluating what to do about its participation in AvtoVAZ. The company says it will act “responsibly” with its 45,000 employees in Russia.
The Group underlines that it is currently implementing the necessary measures to comply with the international sanctions that have been imposed on Russia for the conflict taking place in Eastern Europe and, more specifically, in Ukraine. Logically, and after this complicated decision, it has also had to review the Group’s financial perspectives for this year.
The new forecasts of the Renault Group point to an operating margin of the order of 3% compared to more than 4% previously. Positive Automotive operational free cash flow (compared to ≥ €1,000M previously). In addition, at the time of the results of the first half of this year a charge for non-cash adjustments must be recorded for the value of the Group’s consolidated tangible assets, intangible assets and goodwill in Russia. Assets that, on December 31, 2021, this value amounted to 2,195 million euros.
Last but not least, the Group maintains its value-oriented commercial policy, strengthens its competitiveness and accelerates its cost reduction program.
Source:
Renault Group