The French automaker had previously controlled roughly 30% of Russia’s entire car market
February 28, 2025 at 06:30
- Russia’s major automotive research facility has invested over $1 billion in local operations.
- AvtoVAZ’s chief executive says it’s only fair for Renault to compensate it for the money spent.
- Renault says it doesn’t “foresee any change for the short term” about returning to the country.
While the war between Russia and Ukraine rages on, there’s a glimmer of hope that negotiations could eventually bring an end to the conflict. If that happens, it’s possible that many of the Western companies that pulled out of Russia following the invasion may consider returning. However, doing so will come with a hefty price tag.
The initial reaction to the war was quick and forceful. Sanctions were imposed, and a significant number of companies—particularly automakers—cut ties with the market entirely. One notable example is Renault, which held a controlling 68% stake in AvtoVAZ, the state-owned producer of Lada. Not exactly a decision Renault made lightly, especially given that through its ownership, the French brand controlled roughly 30% of Russia’s entire car market.
Read: Renault Sells AvtoVAZ To Russian Science Institute For Just Over 1 U.S. Cent
Ultimately, it bowed to the political pressure and sold its assets to Russian automotive research facility NAMI for a symbolic 1 Rouble, or roughly 1 US cent. Should Renault want to return to the country and regain control of AvtoVAZ, it will need to cough up 112.5 billion rubles, or the equivalent of $1.3 billion, says AvtoVAZ chief executive Maxim Sokolov.
According to Sokolov, NAMI has invested huge sums of money into AvtoVAZ since Renault’s withdrawal. Speaking to Russian news agency TASS, Sokolov said that approximately 27.5 billion rubles (~$311 million) was invested in 2023, and almost 40 billion rubles (~$453 million) was invested in 2024. A further 45 billion rubles (~$510 million) will be invested this year.
Sokolov says that Renault had been investing roughly 20-22 billion rubles (~$226-249 million) into AvtoVAZ annually before it left. He believes it’s only right for the French brand to reimburse NAMI if it comes back to Russia.
“[The investments] exceed the average annual investment volumes that were made when Renault was the shareholder in the early 20s,” he said. “So, it is clear that these investments will have to be reimbursed somehow upon return.”
Nevertheless, Renault has not provided any indication that it wants to head back to Russia. Speaking with Business Insider, the company said it didn’t “foresee any change for the short term,” about a return to the country.
