Since the outbreak of the Ukraine/Russia war, the world has been pressuring Renault to cease doing business in Russia. It seems that the car manufacturer is finally paying attention. It recently announced that it would suspend operations in its Moscow plant.
But is that all that's in store for the French car brand
when it comes to its Russian business dealings? Read on to learn more about how the war will impact the car industry and Renault in particular. Renault puts a hold on operations in its Moscow plant
Renault announced in late March that it would suspend operations in its Moscow plant. This was a significant development for both that manufacturer and for the car manufacturing industry in Russia as a whole, given that Renault is the Western car manufacturer with the greatest exposure in the Russian market.
Renault had been under pressure to pull back from Russia since the Russian invasion of Ukraine. While companies such as GM had announced early on that they would no longer ship cars to Russia
, Renault held back at first on making any sweeping announcements. Ukraine's foreign minister had even called for a worldwide boycott of the company over its resistance to pulling back on operations in the country.
Ukraine/Russia war impacts Renault in other ways
Reuters
reports that one main reason why Renault has hesitated to completely cease dealings with Russia is that it owns a majority stake in the country's number one car manufacturer, Avtovaz. That position became more difficult to hold on to, however, after Ukrainian president Volodymyr Zelenskiy denounced the company, saying that Renault and other French companies "must stop financing the murder of children and women, of rape."
The decision to suspend operations in the Moscow plant does not mean that the company will cease operations in Russia altogether. Given that Russia represents 8 percent of Renault's market, it must tread lightly when deciding how to operate in an arena now greatly impacted by sanctions.
The company will, however, also institute a partial shutdown at its plants in Togliatti and Izhevsk. It blamed this shutdown on a shortage of electronic components, which has likely been exacerbated by the war and sanctions as well.
MORE: Renault's New EV Crossover Has A Unique Safety Feature
What are Renault's plans for the future?
Renault does recognize that its decision to suspend operations at its Moscow plant is likely to impact its bottom line. The French carmaker has already modified its operating group margin to around 3 percent from at least 4 percent in 2022.
Renault has also changed its automotive cash flow outlook from a previous estimate of at least $1.10 billion to a more generic "positive," indicating an expectation of lower earnings.
Despite its refusal to cease Russian business dealings altogether, Renault insists that it is instituting all measures required to comply with international sanctions.
MORE: Renault Is Building an Electric Car Just for Ride-Hailing Drivers
Find the best car insurance policy for you
Whether or not you drive a Renault, you need to make sure that your vehicle is properly insured. Doing so can be a hassle, given the time that it takes to shop around for policies.
Luckily, now there's a helpful resource at your disposal: Jerry
. Jerry quickly compares rates offered by dozens of car insurance companies to help you find the best deal. Even better, it keeps comparing your rate to other offerings every six months, so you can rest assured that you're not overpaying. Try Jerry today to see how much money you can save on car insurance.
4.7
.jpg&w=64&q=75){kind=avatar}
