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Russia says Renault in talks to sell local subsidiary

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Russia says Renault in talks to sell local subsidiary

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French automaker Renault is in talks to promote its majority stake in Russian automaker AvtoVAZ to a nearby car studies institute, Russia’s enterprise minister said Wednesday.

Renault controls 68 percent of AvtoVAZ, the largest carmaker in Russia with the country’s pinnacle emblem Lada, however, has come under stress to tug overseas due to the fact that Russia’s navy intervention in Ukraine.

Russian Industry and Trade Minister Denis Manturov said Wednesday that Renault would sell for “one symbolic ruble” its stake in AvtoVAZ as well its factory near Moscow that turns out Renault and Nissan brand vehicles.

“It will most likely be our central institute, NAMI, which takes the stakes,” Manturov was quoted as saying by Russian news agencies during a visit to Uzbekistan.

He added Renault will retain an “option for a period of five or six years during which it can decide to repurchase” its stakes.

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NAMI is Russia’s central automotive research and development institute.

Manturov said NAMI would name the future management of AvtoVAZ along with Rostec, Russia’s state-owned defence conglomerate, which is the other shareholder in the carmaker.

Thanks to AvtoVAZ, Russia was Renault Group’s second-largest market behind Europe last year, with around half a million vehicles sold.

Since the launch of the Russian army intervention in Ukraine in overdue February Renault has had trouble keeping its operations going due to a loss of additives following the imposition of Western sanctions.

The Ukrainian government has also put pressure on Renault, calling for a boycott of its motors until it pulls out of Russia.

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