The chains of the French manufacturer’s Moscow factory are at a standstill. Both internally and on the stock market, the tension is palpable. Because Russia is a market and a production site of strategic importance for the automotive group.
For Renault, the war in Ukraine has disastrous consequences. Since the Russian invasion, the situation of the French automotive group “keeps getting worse”, find out Frankfurter Allgemeine Zeitung. Russia is “the second largest market” of the manufacturer and a massive production site. “Renault employs 36,000 people in Russia, i.e. a quarter of its total workforce” and, if the manufacturer were to cease its activities in the country, as other industrialists have done since the start of hostilities, “the consolidation of the group in difficulty for ages would be announced under dark auspices”judges the Frankfurt daily.
Friday, March 4, the Renault action, which has lost 30% of its value since the start of the war, continued to fall. “Nervousness is great on the stock market” and, “internally, the situation is tense”. The Renault factory in Moscow, which lacks parts from subcontractors, has been shut down since the beginning of the week. For 40% of them, these parts must be imported into Russia. And, recognizes a spokesperson for the group, the logistical disruptions are due “not only, but also to war”. Renault does not undertake that the chains will be operational again on Monday.
However, notes the German daily, unlike Volkswagen, which has closed its factories in the country until further notice, “it seems that the Renault group wants to give a signal by trying to keep Russian production in operation”.
A third of the Russian market
It must be said that Renault is also present in Russia via its majority stake of 67.7% in the Russian company Avtovaz, known for its Lada brand. And that Avtovaz has carved out a 21% share of the Russian automotive market in 2021. With its house brands, Renault holds 13%.
Suffice to say that the war in Ukraine “put on the brakes” the return to profitability envisaged by the boss of Renault, Luca De Meo. Not only will it cost the manufacturer in turnover and sales, but it threatens the strategic reorientation of Lada.
The death of Lada compromise
Lada, known for “its massive design, almost unsaleable in Western Europe”, as for “its technical backwardness”, was to be associated with Dacia. The group’s successful low-cost Romanian brand was to bring son “modern design” and its know-how “for a fresh start from Lada”says the German daily.
During the presentation of the manufacturer’s results, “Just two weeks ago, the indefatigable boss of Renault announced his intention to accelerate his modernization projects in Russia” and planned the launch of two new models for the Russian market in 2022. “Those dates now appear to be compromised.”
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Founded in 1949 and led by a team of five directors, the HE DOES, major conservative and liberal daily, is a reference tool in German business and intellectual circles. Considered one of the largest newspapers in
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