Renault Group Suspends Industrial Operations in Russia As of Today, Adjusts Outlook

Renault cars built in Russia 6 photos
Photo: Screenshot from YouTube video by Renault
Renault ElectriCityRenault ElectriCityRenault Mégane E-Tech ElectricRenault Moscow PlantRenault Moscow Plant
Renault has decided to suspend its industrial activities in Russia. The decision was made after a meeting of the company’s board of directors, which approved several items on the agenda. As some of you may be aware, the French marque has a stake in AVTOVAZ, which made stopping everything in that country difficult.
As a result, the French company has decided that its best bet is to suspend its activities at its manufacturing plant in Moscow as of today due to the current situation in the region. The conglomerate has underlined the fact that it already implements the necessary measures to comply with international sanctions against Russia.

Since its participation in AVTOVAZ is an important affair, especially when investments are concerned, but also from an employee and production outlook, the French group decided “to act responsibly towards its 45,000 employees in Russia.Other French companies have taken similar actions.

The Renault Group has announced it is “assessing the available options” in regard to its stake in the Russian industrial conglomerate that owns the Lada brand. It may mean that the French group is considering a sale, but current international sanctions might not allow that to happen. It is difficult to guess what will happen next at this scale and in this situation, though.

The decision has also led to a revised 2022 financial outlook for the Renault Group, which lead to an operating margin of “around 3%,” instead of over 4%, as previously estimated, while the company will have an unspecified, but “positive automotive operating free cash flow,” which previously exceeded EUR 1 billion (ca. $1.1Bn).

The Renault Group has also decided to implement a non-cash adjustment charge to its financial results for the first half of 2022. The change refers to the accounting value of the consolidated intangible assets, including the property, the factory in Russia, its equipment, as well as goodwill, which added up to an estimated 2,195 million euros (ca. $2.416 million) as of December 31, 2021.

Despite this, the Renault Group is set to continue its other plans and vision exhibited in the Renaulution plan.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram

Editor's note: For illustration purposes, the photo gallery shows various Renault models.

Press Release
About the author: Sebastian Toma
Sebastian Toma profile photo

Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
Full profile


Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories