Renault will sell its majority stake in Russian carmaker AvtoVAZ to a Russian scientific institute. The French car group confirmed this on Monday.
A Russian minister already stated that AvtoVAZ, the company behind the car brand Lada, would be transferred to the Russian Ministry of Industry at the end of April.
Since the Russian invasion of Ukraine, Renault has been agonizing over its interest in AvtoVAZ. The French automaker said it would cease operations at a Moscow car factory in March after it was criticized for still operating in Russia. In addition, sanctions also made it increasingly difficult to keep the factories in Russia, which made both Lada vehicles and Renault models running.
The French automaker, which has the largest business in Russia among Western automakers, sells its nearly 68 percent stake in AvtoVAZ to Russia’s Central Research and Development Institute for Automobiles and Motorcycles, named Nami. Renault will have the option to buy back the stake in six years.
“Today, we made a difficult but necessary decision. We are making a responsible choice for our 45,000 employees in Russia,” said CEO Luca de Meo in a commentary on the deal.
Financial details of the transaction were not given. However, Renault, which is 15 percent owned by the French state, already announced in March that it would take charge of almost 2.2 billion euros in the first half of this year to cover the costs of suspending activities in Russia.