VW may sell its factory in Russia

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Citing negotiating circles in Moscow, the Interfax news agency reported on Tuesday that the government commission that controls foreign investment has approved a relevant application.

VW has been operating in Russia for many years and opened its own factory in Kaluga, about 200 kilometers southwest of Moscow, in 2007. In the spring of 2022, after the start of Russia’s war of aggression against Ukraine, VW, along with other western automakers, stopped production in Russia.

Avilon will take full control of Volkswagen Group Rus and its subsidiaries, including several companies selling Scania trucks. “Volkswagen AG is currently in the process of selling its stake in Volkswagen Group Rus and thus its Kaluga plant, which has more than 4,000 employees, to a well-known Russian investor,” the company in Wolfsburg said.

The state-of-the-art factory is considered VW’s most important asset in Russia. According to Russian Deputy Prime Minister Denis Manturov, the search for a contractor from Southeast Asia has already begun to reactivate the production facility. The sale was delayed due to a lawsuit by former VW manufacturing partner Gaz, known for building the Volga sedan during the Soviet era. Gaz sued VW for damages in the three-digit million range for terminating the deal. A court in Russia has since dismissed the case.

The withdrawal of Western automakers from Russia led to a significant decline in vehicle production in the country. According to the AEB business association, only 687,000 new vehicles were sold in 2022 – there were 1,667 million new vehicles in the previous year. Meanwhile, some factories were taken over by Russian investors; usually at a symbolic price and with a buyback option. For example, French automaker Renault transferred its majority stake in Lada manufacturer Avtovaz to the Russian state for one euro last summer.

(SDA)

Source :Blick