It was difficult to maintain the status of Renault and its major shareholder, the French state.How to maintain its activity in Russia, a country that “ignores international law” as Emmanuel Macron said yesterdayVideo shown at the first European Humanitarian Forum, Will the authorities of the attacked country, Ukraine, accuse you of being a “Russian war machine” in the voice of the president and demand a “boycott” of your product anywhere in the world? Even if other private companies such as TotalEnergies and Leroy Merlin explain that withdrawal opens the door to expropriation, it is difficult.
After a board meeting on Wednesday night, Renault announced the suspension of operations at its Renault plant in Moscow and the possibility of selling shares in Russian car maker AvtoVAZ. Measures to urge group management to revise their financial outlook downward, aiming for an operating margin of 4% or less, or about 3%, as originally planned.
Call for a boycott
This announcement will be made when the French automobile group was quoted by the President of Ukraine during a speech to a French agent. Volodymyr Zelensky urged French companies to “stop sponsoring Russian war machines” in a live video conference sent to parliament. And, between Leroy Merlin and Ochan, I quote Renault. “French companies must stop funding women’s children and rape,” he launched the Ukrainian president, besieged by Russian troops in Kyiv, the capital of Ukraine. “Everyone needs to remember that value is more valuable than profit,” he relentlessly dithered when a French company dithered in the face of the economic stake of abandoning the Russian market. Insisted. Hours later, Ukrainian diplomatic Prime Minister Dmytro Kuleba has called for a global “boycott” of French carmakers on the grounds that they “refused to leave Russia.”
Dmytro Kuleba accused Russia of “supporting the war of aggression” in a tweet from Renault, Russia’s second-largest market. Therefore, he calls on customers and businesses around the world to “boycott the Renault Group.”
More than Leroy Merlin and Ochan, Renault’s position in Russia is becoming more and more complicated to maintain, thanks to the status of its first shareholder, none other than the French state (15% of the capital). Involved in sanctions against Moscow.
Nightmare for Renault
So, in Renault, the scenario of withdrawal from Russia looks like a nightmare with considerable loss, but we are also afraid that we will never return to this market. The cost of departure will simply be enormous. French carmakers dominated Aftwaz (the maker of Lada) in the early 2010s, investing billions of euros to modernize industrial tools and develop a new range of models. Russia is one of Renault’s most betting markets for its internationalization if sales are still limited (3 billion in AvtoVAZ alone, or no Renault brand sales). The diamond brand was also preparing to launch a new range with a new strategy focused on profit rather than volume. Russia, with 500,000 cars sold, was Renault’s second largest market after France.