Moscow has announced plans to take over a Renault car factory to revive the Soviet-era Moskvitch brand in the first major case of nationalization of Western assets since the invasion of Ukraine.
Moscow Mayor Ergei Sobyanin said in a vaguely worded statement yesterday that the Russian capital, which has an annual budget of around €43 billion this year, will reopen the city’s car plant, owned by French automaker Renault.
“The foreign owner has decided to close the Renault plant in Moscow.
“It is their right, but we cannot allow thousands of their workers to lose their jobs,” Mr Sobyanin said.
“I made the decision to put the plant on the city’s balance sheet and resume production of passenger cars under the historic Moskvich brand.”
The planned revival of the Moskvitch brand, which caused banter in the late Soviet Union for its somber quality, sparked a wave of sarcastic comments in Russia.
Panorama, a Russian website that publishes satirical “news” and last month predicted the return of Moskvich, joked that its original “news story” was not an accurate prediction but “real news from the future.”
A number of global companies have suspended operations or pulled out of Russia altogether in the wake of crippling economic sanctions, while the Kremlin has hinted it may consider confiscating some Western assets to offset economic losses.
Renault said in a statement its board of directors approved selling Renault Russia to the city of Moscow and a majority stake in another major Russian automaker, Avtovaz, to a state scientific institute.
“We are making a responsible decision towards our 45,000 employees in Russia, while preserving the Group’s performance and our ability to return to the country in a different context in the future,” said Luca de Meo, Renault CEO.
Renault suspended its operations in Russia in March after being named and shamed by Ukrainian President Volodymyr Zelensky for continuing to work and pay taxes for the Kremlin’s war in Ukraine.
The company declined to disclose financial details of the deal, but Russia’s trade minister said last month the French automaker plans to sell its Russian assets for “a symbolic ruble.”
Renault’s business in Russia is estimated at more than 2 billion euros, and car sales in the country have been surpassed only by those in France.
Mayor Mr Sobyanin promised to do his best to keep most jobs at the Moscow plant, as well as at its subcontractors, but it was not clear if the plant would have the capacity in the face of crippling economic sanctions and a de facto trade in cars to produce embargo.
Source: independent