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Renault’s chief executive said the company would not rule out a return to Russia, as Donald Trump pushes for a rapid peace deal to end the Ukraine war.
Renault was one of the international carmakers with the highest exposure to Russia before the country’s full-scale invasion of Ukraine, due to its controlling stake in Avtovaz, known for its production of the Soviet-era Lada cars first developed in the 1970s.
The company sold its Russia business and its almost 68 per cent stake in Avtovaz for 2 roubles in May 2022, a move that amounted to a €2.2bn writedown for the carmaker. However, it maintained an option to buy back its interest in Avtovaz for a six-year period.
Asked about returning to Russia, Renault chief executive Luca de Meo said: “I’d rather focus on building the future than catching up on the past . . . but we’re business people. When we see a business opportunity, we’ll try to grasp it.”
He told the Financial Times: “Honestly, I haven’t thought about that kind of scenario because everything is moving so constantly . . . We have an option: let’s see how things go.”
The company made a tenth of its revenues in Russia before the war and employed 45,000 people, far more than many other multinationals who exited the country in 2022.
Other carmakers such as Volkswagen, Toyota and Hyundai withdrew from Russia following the Ukraine invasion. Mercedes-Benz sold its Russian assets to local dealer group Avtodom, but retained a buyback option similar to Renault’s arrangement.
Other businesses are assessing the consequences of a potential end to war in Ukraine for their activities. Andrea Orcel, chief executive of UniCredit, told the Financial Times that the Italian bank could secure better terms for a Russian unit it refused to offload other than for a “fair price” in 2022.
However, it remains unclear whether the US or Europe will lift sanctions against the Russian economy that could hurt any companies seeking to do business there. Thierry Piéton, the company’s chief financial officer, told journalists earlier on Thursday that the probability of activating the Avtovaz clause was “very low”.
De Meo said the business had other priorities than returning to Russia, including accelerating the launch of its electric and hybrid vehicles to meet impending EU emissions targets.
His comments came as the company warned of a hit to margins of 7 per cent or higher in 2025, down from 7.6 per cent in 2024, because of the prospect of stricter rules from Brussels.
The lower profitability partially reflected plans to incentivise electric vehicle sales, slower sales of combustion engines and capacity cuts at some plants, Piéton said.
For 2024, the company reported strong revenue growth and income as it continued to resist a broader downturn in the European car market.
When Renault exited Russia “in a matter of two weeks, the stock went down 30-35 per cent and everybody was saying we were dead,” De Meo said, pointing instead to the company’s record profitability in 2024.
