Separated from Renault, Avtovaz will resume production in June in Russia

Avtovaz continues its activity without Renault. The first Russian car manufacturer, parent company of Lada, will resume production from the beginning of June, the RIA Novosti news agency reported on Tuesday (May 24th). The company was forced to partially halt production in March after the start of the war in Ukraine disrupted its supplies of electronic components.

A new boss for Avtovaz

“At the beginning of June, we should start production,” said general manager Maxim Sokolov, as quoted by RIA Novosti. Former Russian transport minister, Maxim Sokolov was appointed head of Avtovaz on May 23 to succeed Frenchman Nicolas Maure. This transfer of power took place after Renault’s forced decision to sell its industrial activities in Russia, its second most important market in the world.

VOS INDICES

Renault has signed an agreement to sell its 68% stake in Avtovaz to the Russian science institute NAMI, with a six-year buyout option, as part of the application of European sanctions imposed on Russia due to the war in Ukraine. In a note, the analysis company Inovev considers this takeover option “very hypothetical given the various recommendations put forward by the Russian government concerning manufacturers who have decided to leave Russia”.

Towards lower quality production?

Renault had made heavy investments to turn Avtovaz around and modernize its Russian factories. The new bosses of the automotive group will have to try to do just as well without the help of their French partner. Some experts fear lower quality production in Russia as the Russian government decided in May to lower pollution and safety standards, authorizing for example the production of cars without airbags or ABS brakes. A desperate measure to try to revive a damaged Russian car market.

With Reuters (Reportage Reuters, French version Diana Mandiá, edited by Sophie Louet)

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