Renault more than ever under pressure! The French automotive group was cited by the Ukrainian president who spoke to French deputies. In a videoconference transmitted live to the National Assembly, Volodymyr Zelensky urged French companies “to stop being sponsors of the Russian war machine”. And to quote Renault, among Leroy Merlin and Auchan. “French companies must stop financing the murder of women’s children, rapes”, launched the Ukrainian president besieged by Russian troops in kyiv, the country’s capital. “Everyone must remember that values are worth more than profits,” he insisted relentlessly as French companies dithered in the face of the economic stakes of abandoning the Russian market. A few hours later, the head of Ukrainian diplomacy Dmytro Kouleba squarely called for a global “boycott” of the French car manufacturer because of “its refusal to leave Russia”.
Dmytro Kouleba accuses in a tweet Renault, of which Russia is the second market and where it is present via the company AvtoVAZ, of “supporting a brutal war of aggression”. He therefore calls on “customers and companies around the world to boycott the Renault group”.
More than a Leroy Merlin or an Auchan, Renault’s position on Russia is more and more complicated to maintain, by virtue of the status of its first shareholder, which is none other than the French State (15% of the capital) and which is largely involved in the sanctions taken against Moscow.
A nightmare for Renault
At Renault, the scenario of a withdrawal from Russia therefore takes on the appearance of a nightmare with considerable losses, but also with the fear of never returning to this market. The cost of a departure would simply be colossal. The French car manufacturer took control of Avtovaz (the manufacturer of Lada) in the early 2010s and invested several billion euros in it to modernize the industrial tool and develop a new range of models. If the turnover is still limited (3 billion for Avtovaz alone, that is to say without the sales of the Renault brand), Russia is however one of the markets where Renault was betting the most for its internationalization. The diamond brand was also preparing to launch a new range accompanied by a new strategy more focused on profits than volumes. With 500,000 cars sold, Russia was already Renault’s second largest market, behind France.