Renault, the French automaker, may need to pay 112.5 billion rubles (approximately $1.3 billion) if it seeks to re-enter the Russian market after exiting in 2022. The company sold its assets for one ruble amid Western sanctions, according to Avtovaz, its former Russian partner. Maxim Sokolov, CEO of Avtovaz, stated that both the company and the Russian state have invested 112.5 billion rubles into the business since Renault’s exit, and these investments would need to be reimbursed upon the automaker’s return.
The potential compensation demand highlights the challenges foreign firms face when considering a return to Russia. American President Donald Trump’s willingness to reconcile with Moscow has sparked discussions about Western businesses returning to the Russian market. In 2022, Renault sold its 67.6% stake in Avtovaz to the Russian state, retaining an option to buy back its assets within six years. A Renault spokesperson stated the company does not foresee any short-term changes regarding a return to Russia.
David Szakonyi, an associate professor at George Washington University specializing in Russia’s political economy, emphasized that Sokolov’s statements on compensation should be taken seriously. He noted that Russia’s stance reflects its confidence after surviving Western sanctions and its desire to dictate terms for re-entry. Anton Alikhanov, Russia’s industry and trade minister, echoed this sentiment, stating that companies returning to Russia will face consequences for past decisions.
Despite the size of the Russian market, analysts believe Western companies will remain cautious about re-entering due to high inflation, currency volatility, and concerns over property rights. Szakonyi added that Russia’s recent history of corporate nationalization and asset seizures has undermined investor trust. “Without guarantees in place, Western companies are unlikely to risk engaging with such a volatile regime,” he said.
— news from Business Insider