ROME – After the harsh words of Ukrainian President Volodymyr Zelensky, in video link with the French parliament, the Board of Directors of the Renault group has decided to immediately suspend its activities in Russia. “French companies must leave the Russian market – declared Zelensky in his message – Renault, Auchan, Leroy Merlin and others, must stop sponsoring the Russian war machine. They must stop funding the murder of children and women, and the rape. Everyone will remember that values are worth more than profits ”.
The world of cars stops for the war in Ukraine. From Ferrari to Toyota, production stops for Russia
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Phrases that evidently ended up weighing like a boulder on the top of the transalpine group, reinforced by the head of Ukrainian diplomacy Dmytro Kouleba who on Twitter had asked for a global boycott of Renault, publishing a photomontage of the “positioning” of the Group, an old advertisement with the actor Kevin Spacey, accused of sexual assault, and a photo of a civilian in front of a wrecked car and the words “Sponsor of Putin’s war”. After the decision of the French brand, the Ukrainian Foreign Minister had commented favorably on the commitment made with a new post on Twitter “We welcome the position taken by Renault which has suspended its industrial activities in Russia – wrote Kouleba – It is a responsible move against the backdrop of the barbaric Russian aggression against Ukraine ”.
A painful but inevitable decision by Renault since Russia is the second largest market in the world for the Renault group after Europe, with almost 500,000 vehicles sold in 2021. In addition, AvtoVaz, which was acquired at the end of 2016 with a share of 69%, produces the two best-selling cars in Russia, namely Lada Vesta and Granta, with a total market share of 28.8%. In the official note released yesterday evening, in addition to the suspension of its activities in Russia, it specified that it is already implementing the necessary measures to comply with international sanctions, underlining that “The Group is evaluating possible options on its participation in AvtoVaz, acting responsibly in compared to the 45,000 employees in Russia.
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As a result, it is forced to revise its financial perspectives for 2022 with a Group operating margin of the order of 3% (compared to ≥ 4% previously); a positive operating free cash flow of the Motor business (compared to ≥ € 1 billion previously). A non-cash adjustment charge will be recorded in the results for the first half of 2022, corresponding to the value of the Group’s consolidated intangible and tangible fixed assets and goodwill in Russia. This value amounted to 2,195 million euros at December 31, 2021. The Renault Group remains focused on the implementation of the strategic Renaulution plan. The Group is pursuing its value-based commercial policy, consolidating its competitiveness and accelerating its cost reduction program ”.