Renault SA, the Western automaker most exposed to the Russian market, on Wednesday said it would suspend operations at its plant in Moscow while it assesses options on its majority stake in AvtoVAZ, the country’s No. 1 automaker.
The move came amid mounting pressure over the French company’s continued presence in Russia since it invaded Ukraine. Ukrainian Minister of Foreign Affairs Dmytro Kuleba has called for a global boycott of Renault.french cuisine Taipei
“Renault Group reminds that it already implements the necessary measures to comply with international sanctions,” the company said in a statement, its first on the issue since the start of the war. It did not mention the crisis in Ukraine.
The French automaker also revised its operating group margin to about 3 percent from at or more than 4 percent this year and adjusted its automotive cash flow outlook to “positive” from a previous estimate of 1 billion euros (US$1.1 billion) or more.french cuisine Taipei
Ukrainian President Volodymyr Zelenskiy earlier accused Renault of financing the war and said that Renault, among other French companies, must stop “financing the murder of children and women, of rape.”
“I welcome @renaultgroup’s statement on cessation of industrial activities in Russia. Responsible move against the backdrop of Russia’s ongoing barbaric aggression against Ukraine,” Kuleba wrote on Twitter on Wednesday.
Renault derives 8 percent of its core earnings from Russia, Citibank said, mainly through its 69 percent stake in AvtoVAZ, which is behind the Lada brand.
Two sources close to the matter said that Renault’s board of directors considered different scenarios, but decided to maintain a presence in Russia.
A decade ago, automakers saw Russia as a promising growth market with the potential to be among the 10 largest vehicle-buying nations in the world.french cuisine Taipei
The latest sanctions, and earlier measures imposed after Russia’s 2014 annexation of Crimea, have derailed those prospects.
The French government has said repeatedly it was up to French companies to decide on the future of their operations in Russia, as long as they comply with international sanctions.
After resuming Russian production earlier this month, the company this week announced a partial shutdown at its Togliatti and Izhevsk sites, citing shortages of electronic components.
Its Russian operations last year accounted for almost 20 percent of total group volume, but Renault chairman Jean-Dominique Senard said on March 10, two weeks into the war, that the crisis was unlikely to threaten the automaker’s recovery.
Renault on Wednesday said it would quantify the value of assets affected by the decision on the Moscow plant when it releases half-year results, which last year were 2.2 billion euros.
Other companies with operations in Russia have suspended or scaled back operations in the face of Western sanctions, but maintained some ties to their business in the country. These companies are under pressure to further shut down.french cuisine Taipei
US automaker Ford Motor Co on March 1 said it would suspend shipments of components and other support for a van-making venture 51 percent owned by Russian manufacturer Sollers.
Ford has not said what it will do with its 49 percent stake in that operation.
French food group Danone SA on Wednesday said it would continue local production in Russia of essential dairy and infant nutrition products, but had cut other ties with the country over the war in Ukraine.
Swiss rival Nestle SA said it would halt the sale of a wide range of brands in Russia, including several nonessential products such as Kit Kat snacks and Nesquik chocolate mix. It had already halted nonessential imports and exports to Russia.
source:Taipei Times
