The current situation caused by the Russian invasion of Ukraine has created not only a security and political crisis, but also an economic one. Last month, Renault announced that it was shutting down production lines at AvtoVaz. And while many companies withdrew from the Russian market last month, Renault chose not to do so. Now Renault has announced that it will restart car production at its plant in Moscow.
“Interruptions are caused by more rigorous border controls and the need to change logistics routes,” their official statement said. Interestingly, they did not state that the decision has anything to do with the invasion.
Some may be surprised by this decision, but those who know the car market better will definitely not. The Russian market is the second largest for the French carmaker, where Renault is the majority owner of Lada Holding with 67.61 percent. It also controls almost a third of the Russian car market and employs about 40,000 people.
According to some sources, the French carmaker has decided to restart production in fear of losing its plant. Namely, the Russian government recently announced that it is considering confiscating the factories of foreign companies that are withdrawing from the market during the invasion of Ukraine.
On Monday, AvtoVaz announced that it was temporarily suspending production at the Togliatti and Izhevsk plants between May 21st and 25th due to a lack of electronic components. The Izhevsk plant produces Dacia Logan and Sandero.
Source: Renault Group
