Volkswagen Group closes its operations in Russia
The auto giant is currently negotiating the sale of assets held at the Kaluga plant. According to local media sources, Volkswagen is in talks with a powerful car dealer group, Avilon, for the Kaluga plant. “One of the options is to sell the assets of Volkswagen Group Russia, and therefore the Kaluga plant, to a third party,” said a spokesman for the German company on Wednesday, March 1. “Discussions are ongoing, and the decision has not yet been taken,” the Germans also say. However, the RBK news channel reveals (without any official confirmation from either side) that the Russian car dealer group Avilon is in talks to buy the Kaluga plant. The deal is said to be close to completion. VW halted production at its two factories in Russia in March 2022, following Western sanctions imposed following the outbreak of the war in Ukraine. Also, the export of vehicles to Russia was stopped for all brands in the group. In May, Volkswagen withdrew from production at the Nizhny Novgorod assembly plant. There, production was carried out jointly with the Russian giant Gaz, whose owner is the oligarch Oleg Deripaska, placed on the “Black List” at the behest of Washington. A year ago, several Western firms left Russia after the Kremlin launched a full-scale military offensive in Ukraine.
A source close to the matter told Reuters there are two contenders to purchase the plant: Avilon and Russian conglomerate AFK Sistema, which Kommersant reported last month was also considering buying the asset. Avilon did not respond to requests for comment. VW opened the Kaluga factory, which has a capacity of 225,000 vehicles a year, in 2007. The plant has been furloughed since March 2022, when sanctions imposed by Western countries over the conflict in Ukraine caused supply chains to break down. A string of Western car brands have quit the Russian market in the year since Moscow sent troops into Ukraine, either suspending production or selling their assets in the country to local buyers. Renault transferred its 68 percent stake in Russia’s biggest carmaker, AvtoVAZ, to an auto research institute for one symbolic ruble. Renault’s factory in Moscow was passed to the city’s government. Renault has the right to buy back its AvtoVAZ stake within five to six years from NAMI. Nissan transferred its shares in Nissan Manufacturing Russia to NAMI for 1 euro. The deal gave Nissan the right to buy back the business within six years. The sale included Nissan’s car plant and research facilities in St. Petersburg as well as its sales and marketing center in Moscow.
By Sara Colin
