Putin to reignite Renault plant as Russia moves to outsmart Western sanctions

Russia to create 'war crime' tribunal against Ukraine

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Renault earlier this month ceded its 68 percent stake in Avtovaz, Russia’s biggest car manufacturer, in response to the ongoing war in Ukraine. It is reported to have done so for one symbolic euro, while keeping the door open for a future return.

CEO Luca de Meo said this was the “difficult but necessary decision”, noting his desire to “[preserve] our ability to return to the country in the future”.

But Moscow, the home of the plant, appears unwilling to wait and is, instead, preparing a comeback of Moskvich cars which were produced during the Soviet era.

Moscow’s Mayor Sergei Sobyanin earlier this month said he would nationalise Renault’s car factory in the city and repurpose it to produce cars last manufactured around two decades ago.

He announced: “The foreign owner has decided to close the Moscow Renault plant. It has the right to do this, but we cannot allow thousands of workers to be left without work.

“In 2022, we will open a new page in the history of the Moskvich.”

The country is largely unable to cooperate with Western countries, many of which have imposed heavy sanctions on Moscow, but could find a sturdy partner in China.

Russian truck maker Kamaz is already in talks with Chinese carmaker JAC about using its design, engineering and production platform, according to Reuters.

A link with FAW, another Chinese carmaker, has also been touted.

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In a sign of the eagerness to get the brand up and running, Russian business paper Vedomosti cited a source who suggested production would begin no later than the fourth quarter of this year.

But Autostat head Sergei Tselikov said the reject could take longer than the Russian leadership might hope.

He, quoted in Reuters, stressed that “it takes at least two years and at least $1billion to develop a new car.”

German newspaper WELT reported that “the only way to make such a change quickly is to build on the basis of an existing vehicle, one from China”.

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It added that both JAC and FAW are “closely linked” to Volkswagen in China.

A Russia-China link in car manufacturing would, the paper highlighted, rely on technology “which was developed with know-how from the German Volkswagen Group”.

Some (particularly older) Russians have joked about the return of Moskvich, about which there are mixed memories.

One, quoted in the Guardian, joked: “Russia has invented a time machine. It can move the whole country through time, but only back into the Soviet Union.”

There are close to 200,000 Moskvich cars still registered in Russia, according to Autostat – 46,000 of which are more than 35 years old.

The jibe strikes at the heart of reported fears among some Kremlin officials who believe the “special military operation” will set Russia back and leave it increasingly isolated on the world stage for years to come.

These told Bloomberg they could not raise their concerns to Vladimir Putin himself because they believe there is “no chance” he will change course.

Additional reporting by Monika Pallenberg.

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