A call for a global “boycott” of Renault had just been launched by the head of Ukrainian diplomacy. In the afternoon, in video in front of the French Parliament, President Volodymyr Zelensky had urged French companies to stop supporting the Russian “war machine”, also citing Leroy Merlin and Auchan.
While Renault first announced its intention to stay in Russia, which is the group’s second largest market, the Renault Group board of directors made an about-face in the evening. In a statement, he said that “the activities of the Renault factory in Moscow are suspended from this day. The group is evaluating the possible options regarding its stake in AVTOVAZ, while acting responsibly towards its 45,000 employees in Russia”.
A decision that will weigh on the group’s accounts. “As a result, Renault Group is forced to review its financial outlook for the year 2022 with a Group operating margin of around 3%”, against more than 4% previously, the group announced in a press release published after calls to a global boycott of the brand launched by Ukrainian diplomacy. AvtoVAZ, 69% owned by Renault, is the Russian market leader with its Lada brand.
Call for boycott
So far the French car manufacturer had not questioned its presence on site: if the production of its factory is slowed down by supply problems, it resumed two days ago. Concerning Avtovaz, the French group has invested a lot in it and fears a forced nationalization in the event of departure.
But the brand image of Renault accused of “supporting a brutal war of aggression” risked being tarnished, this may have played in the balance. Dmytro Kouleba, the head of Ukrainian diplomacy had called “customers and companies around the world to boycott the Renault group”.
Dmytro Kouleba illustrated his tweet with a very polished photo montage showing, on the one hand, the “positioning of the Renault group” and its slogan “Passion for life” with a smiling customer and, on the other, the “position” of the manufacturer, with a civilian in front of a destroyed car and the inscription “Sponsor of Putin’s war”.
Renault refuses to pull out of Russia. Not that it should surprise anyone when Renault supports a brutal war of aggression in Europe. But mistakes must come with a price, especially when repeated. I call on customers and businesses around the globe to boycott Group Renault. pic.twitter.com/STFeafnCoi
— Dmytro Kuleba (@DmytroKuleba) March 23, 2022
Adeo, the holding company of Leroy Merlin has chosen another path. Ella replied that a closure would be considered a “premeditated bankruptcy”, “opening the way to an expropriation which would strengthen the financial means of Russia”.
“The decision to maintain our activity in Russia is a decision that is not easy”, continues Adeo, who says he has “an employer’s responsibility vis-à-vis (its) 45,000 employees and their families who contribute for 18 years in the construction of Leroy Merlin Russia”.
“We have no reason to condemn our Russian teams for a war that they did not choose” further believes the company with a strong presence in the country, its second market after France and where it makes 18% of its overall activity.