Russia taking over Renault factory to revive Soviet car brand – Business Insider

May 19, 2022 by No Comments

  • Russia is reviving a Soviet-era car brand called Moskvich at an abandoned Renault factory. 
  • Russia is taking over a factory left behind by the French carmaker, which is exiting the country.
  • Renault is one of hundreds of companies leaving Russia in the wake of its invasion of Ukraine. 

Western businesses continue to flood out of Russia in the wake of Vladimir Putin’s war on Ukraine. 

The mass exodus includes French carmaker Renault, which closed a deal on Monday to sell all of its operations in Russia to the city of Moscow and a state-backed group. Russia plans to use Renault’s Moscow plant to revive a Soviet-era car brand called Moskvich, the city’s mayor, Sergei Sobyanin, said in a blog post. 

A Soviet-era Moskvich car.

FOCUS/Toomas Tuul/Universal Images Group via Getty Images

Sobyanin said the plant has a “long and glorious history,” and that Russia will bring back the “legendary” brand with the help of Kamaz, a Russian manufacturer of heavy-duty vehicles and engines. Moskvich will at first sell traditional combustion-engine cars, and later electric ones, he said. 

The name Moskvich translates to “Moscovite.” 

A Soviet-era Moskvich car.

Petr Svarc/Education Images/Universal Images Group via Getty Images

Renault reportedly sold its Russian operations for pennies on the dollar — or, perhaps more precisely, rubles on the euro. Renault offloaded its businesses for 2 rubles, the Financial Times and Reuters reported. The automaker said it will take a 2.2 billion euro hit on the transaction.

Russia is increasingly isolated from global trade, and that includes cars and car parts. Sobyanin said he would work with the Russian government to localize production of auto parts. The new Moskvich cars will use a Chinese platform, Reuters reported on Thursday, citing two sources. 

Soviet-era cars became notorious outside the country for their poor quality and reliability issues. The Yugo in particular, a Yugoslavian compact that was briefly sold in the US starting in the 1980s, became the butt of many jokes. (What do you call a Yugo at the top of a hill? A miracle.)



Leave a Comment

Your email address will not be published. Required fields are marked *