The Renault Factory’s Fate in Russia: A $0.01 Transaction

As the conflict between Russia and Ukraine shows signs of de-escalation, Western brands, including automotive manufacturers, that previously withdrew from Russia may consider re-entering the market. However, according to Carscoops, this decision could prove to be costly.

For instance, Renault once held a controlling stake of 68% in AvtoVAZ, the manufacturer of the Lada brand of automobiles in Russia. At one point, through this ownership, Renault held approximately 30% of the automotive market share in Russia.

Subsequently, Renault had to sell its factories to the NAMI research institute of Russia for a symbolic price of one ruble, equivalent to approximately 0.01 USD.

AvtoVAZ CEO Maxim Sokolov stated that if Renault wants to return to Russia and regain control of AvtoVAZ, the French automaker will have to pay 112.5 billion rubles (approximately $1.3 billion).

Mr. Maxim Sokolov pointed out that NAMI has invested a substantial amount in AvtoVAZ since Renault’s withdrawal. Speaking to TASS, the CEO revealed that AvtoVAZ received approximately 27.5 billion rubles ($311 million) from NAMI in 2023 and nearly 40 billion rubles ($453 million) in the previous year. It is anticipated that an additional 45 billion rubles will be invested in AvtoVAZ this year, equivalent to about $510 million.

According to Mr. Maxim Sokolov, Renault used to invest 20-22 billion rubles ($226-$249 million) annually in AvtoVAZ before their departure. He believes that in the event Renault decides to return to Russia, it is reasonable to expect the French automaker to reimburse the investment made by NAMI in AvtoVAZ.

Nonetheless, Renault has not shown any indication of wanting to re-enter the Russian market. In a statement to Business Insider, a Renault representative said there are no short-term plans to return to Russia.

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