Moscow to seize Renault factory and revive a Soviet-era marque
MOSCOW has announced plans to take over a Renault car factory to revive the Soviet-era Moskvitch brand in the first major case of nationalisation of Western assets since the invasion of Ukraine.
Sergei Sobyanin, the mayor of Moscow, said in a vaguely worded statement yesterday that the Russian capital, whose annual budget stands at about £37billion this year, would reopen the city’s car plant owned by the French carmaker Renault.
“The foreign owner has decided to shut down the Renault plant in Moscow. It is their right, but we cannot allow thousands of its workers to lose their jobs,” Mr Sobyanin said. “I have made the decision to put the factory on the city’s balance sheet and resume the production of passenger vehicles under the historic Moskvitch brand.”
The planned revival of the brand, which was a butt of jokes in the late Soviet Union for its dismal quality, prompted a wave of sarcastic comments in Russia. Panorama, a Russian website that publishes satirical “news” and predicted the return of the Moskvitch last month, joked that its original “news story” was not an accurate prediction but “real news from the future”.
A flurry of global companies have suspended their operations or withdrawn from Russia altogether in the aftermath of crippling economic sanctions, while the Kremlin has indicated it might consider seizing some Western assets to set off the economic losses.
Renault, in a statement, said its board of directors had approved to sell Renault Russia to the city of Moscow and a controlling stake in another major Russian carmaker, Avtovaz, to a stateowned science institute. “We are making a responsible choice towards our 45,000 employees in Russia while preserving the group’s performance and our ability to return to the country in the future, in a different context,” Luca de Meo, Renault’s chief executive, said.
Renault suspended its operations in Russia in March after it was named and shamed by Ukrainian President Volodymyr Zelensky for continuing to work and pay taxes for the Kremlin’s war in Ukraine. The company would not disclose financial details but Russia’s trade minister last month said the French carmaker was planning to sell its Russian assets for “one symbolic rouble”.
Renault’s business in Russia is estimated to be worth more than €2billion and its car sales in the country were second only to those in France.
Mayor Sobyanin promised to do his best to save most of the jobs at the Moscow factory as well as its subcontractors, but it was not clear if the plant would have the capabilities to produce cars in the face of crippling economic sanctions and a de facto trade embargo.