VW plant in Kaluga
The car manufacturer had been active in Russia for many years and opened its own factory in 2007, almost 200 kilometers south-west of Moscow.
(Photo: dpa)
According to media reports in Moscow, the Volkswagen Group has received approval to sell its assets in Russia to the Russian car dealer Avilon for 125 million euros. The Interfax news agency reported on Tuesday in Moscow, citing negotiating circles, that the government commission for the control of foreign investments has approved a corresponding application.
VW had been active in Russia for many years and opened its own factory in Kaluga in 2007, almost 200 kilometers southwest of Moscow. In the spring of 2022, after the start of the Russian war of aggression against Ukraine, VW, along with other western carmakers, stopped production in Russia.
Avilon will gain full control of Volkswagen Group Rus and its subsidiaries, including several companies that sell Scania trucks. “Volkswagen AG is currently in the process of selling its shares in Volkswagen Group Rus and thus also the Kaluga plant with its more than 4,000 employees to a well-known Russian investor,” said the company in Wolfsburg, without giving any further details.
The state-of-the-art factory is considered to be VW’s most important asset in Russia. According to Russia’s Deputy Prime Minister Denis Manturov, the search for a contractor from Southeast Asia is already underway to put the production facility back into operation.
The sale was delayed by a lawsuit from former VW manufacturing partner Gaz – known for building the Volga sedan in Soviet times. Gaz had sued VW for damages in the three-digit million range for terminating the agreement. A court in Russia has since dismissed the lawsuit.
Slump in Russian vehicle production
The withdrawal of Western carmakers from Russia has led to a significant slump in vehicle production in the country. According to the AEB business association, only 687,000 new vehicles were sold in 2022 – compared to 1.667 million new vehicles the year before.
In the meantime, some plants have been taken over by Russian investors; often at a symbolic price and with a buyback option. For example, the French carmaker Renault handed over its majority stake in the Lada maker Avtovaz to the Russian state for one euro last summer.
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