France’s Renault restarts auto production in Russia

Renault derives a larger chunk of its revenues from Russia than other major carmakers

editor: REMIX NEWS
author: Világgazdaság
Russian Prime Minister Vladimir Putin, second right, and Renault Chief Executive Carlos Ghosn, left, are seen during their meeting at the Novo-Ogaryovo residence outside Moscow, Tuesday, Nov. 2, 2010. French car maker Renault says it is considering boosting its stake in Russia's struggling car maker AvtoVAZ from 25 percent to a controlling 50 percent plus one share. (AP Photo/RIA Novosti, Alexei Nikolsky, Pool)

Unlike other major international companies that have severed ties with Russia following the country’s invasion of Ukraine, French car manufacturer Renault has resumed production at its Moscow plants.

The company suspended production in Russia last month, citing supply problems.

Its decision to restart production is reportedly supported by the French government, which is the main shareholder in the plant, according to sources quoted by Reuters.

It means that Renault will continue to have more operations in Russia — where the company employs 40,000 people — than most of its European competitors, at a time when the United States, the United Kingdom and the European Union are all seeking to isolate Russia economically.

Bloomberg Intelligence estimates that approximately €5 billion ($5.5 billion) of Renault’s revenue last year came from Russia, and roughly €315 million in operating profit could be jeopardized by a continued suspension of its operations.

Car manufacturers that have ceased production in Russia to date include Volkswagen and its subsidiary Audi, Toyota Motor Corp, Daimler Truck, Volvo, and Ford.

The question is if Putin remains in power how many of these manufacturers will return to the Russian market. The answer will depend greatly on their governments’ positions, global economic conditions, the progress of the war, and the importance of the Russian market for each respective company.

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