French carmaker Renault has sold its Russian assets to the Russian government, both parties announced on Monday, as foreign companies leave the country amid Moscow's military campaign in Ukraine.
Renault controlled 68% of AvtoVAZ, the largest carmaker in Russia with the country's top brand Lada, but was under pressure to pull out of the country since Russia's military intervention in Ukraine.
Thanks to AvtoVAZ, Russia was Renault Group's second-largest market behind Europe last year, with around half a million vehicles sold.
"Agreements were signed on the transfer of Russian assets of the Renault Group to the Russian Federation and the government of Moscow," the ministry said in a statement.
Under the agreement Renault will retain a six-year option to buy back the stake in AvtoVAZ.
The deal also included Renault's Moscow plant.
No financial details were provided but Russian Industry and Trade Minister Denis Manturov said in April that Renault planned to sell its Russian assets for "one symbolic ruble."
"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 Chief Executive Luca de Meo said in a statement.
Moscow Mayor Sergei Sobyanin for his part said that Renault decided to close its plant in the capital.
"This is its right, but we cannot allow thousands of workers to be left without work," Sobyanin said in a statement, adding he decided to resume production of passenger cars under the Soviet-era Moskvich brand.
"In 2022, we will open a new page in the history of Moskvich," he added.
"We will try to keep most of the team directly working at the plant and with its subcontractors."
Since President Vladimir Putin sent troops into Ukraine on Feb. 24, Renault has had difficulty keeping its operations going due to a lack of components following the imposition of Western sanctions.
Ukrainian authorities have also put pressure on Renault, calling for a boycott of its vehicles until it pulls out of Russia.
