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Renault’s Russian Sales Plummet as Lada Factories Sit Idle

Renault’s Russian Sales Plummet as Lada Factories Sit Idle

Renault SA’s car sales in Russia, its second-biggest market, sunk last month as the French automaker idled factories and lays plans to withdraw from the country.

Shipments of Lada vehicles produced by Renault’s Russian venture fell 56% in March compared with the same month last year, according to a statement Wednesday. That’s the ninth straight monthly decline for the brand that dates back to the Soviet era.

Renault’s Russian Sales Plummet as Lada Factories Sit Idle

Sales of Ladas will probably continue to drop off due to sanctions over Russia’s invasion of Ukraine that have hindered trade and prevented the import of key parts needed for production. The vehicles are made by Renault’s AvtoVaz venture at two Russian factories, which have either been halted or operating at reduced capacity since the war started.

The Avtovaz business, which Renault majority owns, has made the French firm the most exposed automaker to the conflict. The manufacturer last month announced it was suspending production at its own plant in Moscow and assessing options for AvtoVaz. 

Overall, Renault car and commercial vehicle sales volumes in Russia dropped 64% in March compared with a worldwide sales slump of 25%.

Renault revised downward its financial outlook for this year on the Russia decision and is planning to write down the value of the business, which was evaluated at 2.2 billion euros ($2.4 billion), including goodwill, at the end of last year. 

Renault rose as much as 2.1% in early trading in Paris Wednesday. The company has lost about 28% of its market value since the start of the invasion. 

Avtovaz has blamed factory downtime on a lack of electronic components. Workers are on an extended vacation this week, the venture has said, with the intention of restarting operations. 

©2022 Bloomberg L.P.