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HomeEuropean NewsEx-Magna CEO might take management of Volkswagen’s belongings in Russia 

Ex-Magna CEO might take management of Volkswagen’s belongings in Russia 


The Russian media reported that Volkswagen AG might promote its Russian enterprise – together with an meeting plant and an inside combustion engine producer – to Austrian enterprise conglomerate Steyr Automotive owned by ex-Magna CEO Siegfried Wolf.

In keeping with folks aware of the matter the corporate goals to renew the manufacturing of VW vehicles in Russia, suspended in March in a response to Russia’s unprovoked invasion of Ukraine, underneath a unique model. VW will proceed to produce elements and spare elements to Russia in addition to present engineering providers and thus maintain benefiting from the Russian market. The manufacturing websites might be managed by Russia’s automaker GAZ Group owned by Wolf’s long-time Russian enterprise accomplice Oleg Deripaska (at the moment underneath EU, US and UK sanctions). In 2010-2019 Siegfried Wolf himself chaired the board of GAZ Group and based on some media studies had a minority stake within the firm.

Volkswagen has been manufacturing automobiles in Russia since 2007 on its meeting plant in Kaluga, 170 km southwest of Moscow. The mannequin vary consists of Volkswagen Tiguan, Volkswagen Polo and Škoda Speedy. In 2011 Volkswagen and GAZ Group signed an settlement for the contract meeting of Volkswagen and Škoda vehicles on the GAZ plant in Nizhny Novgorod. In 2015 the corporate began manufacturing of its most fashionable engines at Kaluga plant. Volkswagen whole investments in Russia exceeded EUR2 billion.

In 2021 VW offered round 199,000 automobiles within the Russia, over 80% of which had been made at firm’s manufacturing websites within the nation. Amongst them had been VW Polo and VW Tiguan in addition to Škoda Speedy, Škoda Kodiaq and Škoda Octavia. VW estimated its share within the Russian auto market at over 11% in 2021.

In March 2022 in response to Russia’s assault on Ukraine, Volkswagen’s Group Board of Administration determined to cease producing automobiles in Russia and to halt exports to the nation. Over 4,000 of its staff on the Kaluga plant stay employed and proceed to be paid a portion of their wages in compliance with Russian statutory necessities whereas the manufacturing remains to be suspended.

Since Russia’s invasion of Ukraine, all European, Japanese and Korean automakers have halted manufacturing in Russia citing EU and US sanctions, logistical challenges and an absence of severely restricted availability of elements from suppliers. Consequently automobile gross sales in Russia plunged greater than 80% in Might hitting the bottom stage since 2006.

Rumors have it that Vladimir Putin considers nationalizing the manufacturing vegetation and different belongings international automakers have in Russia. Beside Volkswagen, Stellantis, Ford and Mercedes-Benz could be the automakers most affected by any such strikes which generally are referred to as by Russian authorities officers “exterior administration.”

“If international house owners shut the corporate unreasonably, then in such instances the federal government proposes to introduce exterior administration,” Russian Prime Minister Mikhail Mishustin instructed media. “Relying on the choice of the proprietor, it can decide the longer term destiny of the enterprise.”

In Might France’s Renault offered its Russian belongings to the Russian authorities for symbolic one ruble with the decision again possibility for the 68% stake within the largest native automaker Avtovaz.

 

New vehicles parked on the Volkswagen Group plant in Kaluga, Russia.

Volkswagen was additionally stated earlier to be in talks with Kazakh-based automaker Asia Auto relating to sale of its Russian belongings, however there have been no developments up to now.

Whereas the dimensions and particulars of the potential Volkswagen – Steyr deal are nonetheless unknown it might look profitable for Volkswagen within the present geopolitical surroundings. On the one hand it permits the corporate to partially cowl its multibillion investments in Russia, on the opposite – VW will formally stop Russia – an ethical pledge for a significant EU firm in a response to Russia’s invasion of Ukraine – whereas maintain benefiting from the Russian market by supplying its elements and spare elements and offering engineering providers.

However then there’s an apparent moral query. Oleg Deripaska, as soon as the richest individual in Russia, is effectively often known as a member of Putin’s inside circle. He has been sanctioned by the EU, US and UK. It’s clear he’ll profit from this deal – as VW former manufacturing websites might be managed by his GAZ Group. And making a sanctioned Russian oligarch richer is one thing opposite to what sanctions had been meant for.

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