Volkswagen can definitely sell its factory and all activities in the Russian market. It was approved by the local government. According to the Interfax agency, he will receive three billion crowns for this. At the same time, Renault sold its share in the AvtoVaz factory for one ruble, Nissan for one euro. But other companies have agreed on buyback options.
Russian authorities have approved an agreement according to which the Russian car dealer Avilon will pay up to 125 million euros (roughly three billion crowns) for the Russian activities of the German automaker Volkswagen.
This was reported by the Interfax agency, which refers to a source familiar with the relevant decision of the subcommittee of the government commission for the control of foreign investments. The commission’s approval is needed if Russian operations sell companies from countries that Moscow considers hostile.
According to Interfax, the decision of the authority concerns the Russian division of Volkswagen Group Rus and its subsidiaries. Russian Minister of Industry and Trade Denis Manturov already told the TASS agency on Monday that a government commission approved the sale of Volkswagen’s main factory in Russia to Avilon. The factory, which is located in the Russian city of Kaluga and is part of the Volkswagen Group Rus division, also assembled cars from the Czech car manufacturer Škoda Auto.
Volkswagen Group Rus declined to comment on the value of the transaction. If Volkswagen really received up to 125 million euros for its Russian activities, it would contrast with the development of other Western car companies. They mostly sold their Russian activities for only a symbolic amount, however, in the agreements, they reserved the option of buying them back, Reuters reported.
Volkswagen opened the plant in Kaluga with an annual capacity of 225,000 cars in 2007. Last March, however, it stopped operations in connection with the sanctions that Western countries imposed on Russia for its attack on Ukraine.
Western sanctions have dealt a severe blow to the Russian automotive sector. Total passenger car production in Russia fell 67 percent to 450,000 last year, the lowest level since the fall of the Soviet Union in 1991.
Leave a Reply