It looks like something out of a propaganda film.
When Russian President Vladimir Putin decided to invade Ukraine, not only did he sign the death warrant of thousands of people, but he also doomed Russia's economy, and more specifically, its automotive industry. Multiple brands have pulled out of Russia, or suspended sales and production, and even Russian racing stars have been punished for the actions of a bear-riding maniac. The latest manufacturer to dip out of the Russian Federation is French automaker Renault, but instead of letting all of its infrastructure waste away, Renault is selling it to Moscow City, which plans to revive the Soviet-era Moskvich brand which famously built some of the most boring cars up until the early 2000s.
Renault announced on Monday that it would be selling 100 percent of Renault Group's shares in Renault Russia to Moscow City, including its 67.69 percent share in AVTOVAZ to NAMI (the Central Research and Development Automobile and Engine Institute). The agreement does however give Renault the option to buy back its share of AVTOVAS during the next six years.
"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. I am confident in the Renault Group's ability to further accelerate its transformation and exceed its mid-term targets," said Luca de Meo, CEO Renault Group.
After the sale is completed, Renault's Moscow factory will be repurposed to manufacture the well-known Moskvich brand of vehicles.
"The foreign owner has decided to close the Moscow Renault plant. It has the right to do this, but we cannot allow thousands of workers to be left without work. In 2022, we will open a new page in the history of the Moskvich," said Moscow's mayor Sergei Sobyanin.
Moskvich cars were last produced in the early 2000s, and declared bankruptcy shortly after being privatized after the fall of communism in the early 90s. It is doubtful if Moskvich will be able to make a successful return under the current Russian Economic climate, and according to Autostat head, Sergei Tselikov, it will take around $1 billion, and two years of development work to produce a new car.
Moskvich cars are known for their extremely basic design and utilitarian nature. According to Times Live, there are nearly 200,000 Moskvich cars still registered in Russia, with nearly a quarter of those cars older than 35 years. We covered the story of a 92-year-old lady who traded her Moskvich in for a Tesla Model X after driving soviet cars for 60 years. That was a nice little upgrade. Unfortunately, Russian natives can forget about such upgrades, and will most likely return to soviet-era motoring within a few years.
Sobyanin believes that with the cooperation of the Russian trade ministry and Russian truck maker Kamaz, the factory will be able to produce new Moskvich vehicles. Perhaps they should approach Ukrainian companies to supply the braking systems and airbags.