Renault is keeping open the option of returning to Russia — the deal gives the company various windows to buy back its interest in Avtovaz over the next six years, the company added.
“Today, we have taken a difficult but necessary decision; and we are making a responsible choice towards our 45,000 employees in Russia, while preserving the Group’s performance and our ability to return to the country in the future, in a different context,” Renault CEO Luca de Meo said in the statement.
Renault announced on March 23 that it was suspending activities at its Moscow factory and would take a charge of nearly 2.2 billion euros ($2.3 billion) to write down the value of its Russian business to zero.
Avtovaz’s Lada brand represented nearly 21% of the Russian market in 2021.
Shortly before Renault’s announcement later that month, the company was one of a few French businesses called out by Ukrainian President Volodymyr Zelensky for continuing their operations in Russia. Ukrainian Foreign Minister Dmytro Kuleba went further, calling for a global boycott of the carmaker.
Lada — an icon of Soviet-era self-reliance — could, in theory, stand to benefit from the absence of foreign competition. But it is heavily dependent on imported parts.
The company did not elaborate on which models would be affected, but said they would gradually become available in the coming months.
Evgeny Eskov, editor-in-chief of Russian car industry journal Auto Business Review, told CNN Business last month that the redesigned models will be simpler versions of current cars, without extra features such as ABS.
“Just brutal cars from the past,” he wrote in an email to CNN Business.
-— Clare Sebastian, Anna Cooban and Xiaofei Xu contributed to this article.