French auto giant Renault suspends operations in Moscow factory
French car maker Renault says it has suspended operations at its Moscow factory after Kyiv called for a boycott of the company. The ongoing presence of French companies in Russia has become an increasingly controversial subject as the war in Ukraine enters its second month.
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Renault is also considering "possible options" for its Russian affiliate AvtoVAZ, the company said in a statement, adding that it had downgraded its 2022 financial outlook.
"Renault Group has to revise its 2022 financial outlook with a Group operating margin of around 3 percent versus at least 4 percent previously," it said.
Ukraine's foreign minister on Wednesday called for a global boycott of Renault over its earlier refusal to leave the Russian market in the aftermath of the Kremlin's invasion of Ukraine.
"Renault refuses to pull out of Russia," Foreign Minister Dmytro Kuleba said on Twitter ahead of the company's announcement. "I call on customers and businesses around the globe to boycott Group Renault."
In a statement issued later Wednesday, Renault said the group's "activities in its manufacturing plant in Moscow are suspended as of today".
'Responsible move'
Following the announcement, Kuleba tweeted that he welcomed the news, calling it a "responsible move against the backdrop of Russia's ongoing barbaric aggression against Ukraine".
Partly state-owned, Renault had suspended its production at its plants near Moscow last month after Russia's invasion but subsequently resumed production according to reports.
Russia's top automaker, AvtoVAZ is part of the Renault-Nissan group with the French company owning a 69 percent stake.
Renault is particularly exposed as it invested in AvtoVAZ alongside Rostec, a state-owned defence conglomerate run by a sanctioned close ally of Russian President Vladimir Putin.
"Regarding its stake in AvtoVAZ, Renault Group is assessing the available options, taking into account the current environment, while acting responsibly towards its 45,000 employees in Russia," the statement said.
The company said that it is complying with international sanctions on Russia.
Pressure rising
The ongoing presence of more than 500 French companies in Russia has become an increasingly controversial subject in France amid demands from some for them to join boycotts announced by American or British groups such as McDonald's, Apple or BP.
No other French group has so far announced it is pulling out of the Russian market, where they are the biggest foreign employers with 160,000 staff members, according to the French economy ministry.
Ukrainian President Volodymyr Zelensky on Wednesday urged French firms such as Auchan, Renault and Leroy Merlin to withdraw from Russia.
Economy Minister Bruno Le Maire said this month that there was "a problem of principle of working with any political or economic figure close to the Russian government", but he has not called on companies to withdraw.
Pavel Chinsky, head of the Franco-Russian Chamber of Commerce, told BFM television this week that French groups were following the same approach as their EU counterparts in Germany and other members of the bloc.
"At this time we are hoping to preserve as many jobs as possible," he said.
(with wires)
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