The Limited Times

Now you can see non-English news...

War in Ukraine: Renault suffers from dependency on Russia

2022-04-22T12:02:55.200Z


The car company Renault was once a key partner of the Kremlin, now the connections to Moscow are a burden on business. Sales fell a whopping 17 percent in the first quarter.


Enlarge image

Lada production at Avtovaz in Izhevsk, Russia: Renault holds the majority

Photo:

GLEB STOLYAROV / REUTERS

Renault has recently invested and produced a lot in Russia and also sold a lot there - the group played an important role in the transformation of the Russian car industry and holds a majority in the Lada manufacturer Avtovaz.

These connections are now the French company's undoing in view of the Russian war of aggression in Ukraine.

The dependency on the Russian business and the lack of semiconductors have brought Renault the highest sales decline in more than ten years.

In the first quarter, sales fell by 17 percent to 552,000 vehicles, as the company announced.

Deliveries had not fallen so sharply since the peak of the financial crisis in 2009.

The drop in sales did not have such a strong impact on sales, because Renault was able to make up for some of this thanks to higher prices and increasing sales of electric cars.

Revenues shrank by 2.7 percent to 9.7 billion euros.

Without the subsidiary Avtovaz and Renault Russia, sales fell by only one percent.

What will happen to Renault's Lada stake?

Regarding the stake in Avtovaz, Renault said talks were progressing.

The group had shut down operations at its plant in Russia at the end of March because of the Russian attack on Ukraine and said it was examining options for Avtovaz.

Renault has now confirmed the outlook for the operating return, which had been reduced to three percent on this occasion.

Management intends to update the forecast in the course of the year.

Sales of electric and hybrid cars rose 13 percent at the start of the year and accounted for 36 percent of Renault's total sales.

Because of the chip shortage that is still rampant in the industry, the group has to reduce its production plans for this year by 300,000 vehicles.

According to Renault, most of this was in the first half of the year.

As with other car manufacturers, the order books at Renault are full.

However, due to missing components, the demand cannot be met.

Customers often have to wait a long time for a new car.

Ghosn surprised by arrest warrant

Meanwhile, former Renault and Nissan CEO Carlos Ghosn, accused of tax evasion and embezzlement, is making a name for himself again.

According to a spokesman, the 68-year-old was surprised by media reports that prosecutors in France had issued international arrest warrants against him and other people.

In addition to him, it is said to be current and former managers of a car dealership in Oman.

According to the Wall Street Journal, a coroner in Nanterre has issued a total of five arrest warrants.

The former top manager is said to have smuggled millions of dollars from Renault through the Omani car dealer and used it for personal purposes.

This also includes a 120-foot yacht.

Ghosn was arrested in Tokyo four years ago and placed under house arrest on bail after several months in prison.

He used this for a spectacular escape to Lebanon, where he grew up.

Ghosn denies any wrongdoing and sees himself as a victim of a conspiracy.

Apr/Reuters

Source: spiegel

All business articles on 2022-04-22

You may like

News/Politics 2024-01-31T07:59:08.595Z
News/Politics 2024-03-02T21:24:10.139Z

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.