Emmanuel Macron under fire as Renault resumes Russian production Business

Emmanuel Macron’s government has been criticized for backing Renault’s decision to oppose a Western boycott of Russia.

Tom Tugendhat, chairman of the House of Commons Foreign Affairs Committee, said the French carmaker’s decision to restart manufacturing in Moscow would only “protect” the Russian economy from the impact of Western sanctions.

The company behind the Clio and Kadjar models was forced to halt production last month due to logistical problems caused by Vladimir Putin’s invasion of Ukraine.

However, Renault received the blessing of its major shareholder, the French government, to continue operating in Russia despite a widespread backlash from Western companies.

Mr Tugendhat criticized Renault’s decision, saying recent weeks had shown the number was strong.

“The response to Russia’s barbaric invasion of Ukraine has been phenomenal and huge sacrifices have been made,” he added. “Western countries have imposed sanctions unprecedented in their scope and scale, but we must hold our ground.

“Renault’s production restart only shields the Russian economy from the impact of Western sanctions.”

Mr Macron spearheaded an ill-fated attempt to play peacemaker with Mr Putin, who continued to bomb Ukraine despite the French president’s efforts to secure a ceasefire.

His talks with the Russian leader have drawn criticism that his strategy has now failed and his attempts to maintain widespread peace in Europe are playing into the hands of the Kremlin.

Renault’s move came as TotalEnergies pledged to stop buying oil and gasoline from Russia despite holding minority stakes in the country’s energy companies including Novatek, Yamal LNG, Arctic LNG 2 and TerNefteGaz.

The state-backed French oil giant said: “Given the deteriorating situation in Ukraine and the existence of alternative sources to supply Europe, TotalEnergies has unilaterally decided not to enter into or renew contracts for the purchase of Russian oil and oil products, in order to stop all its purchases of Russian oil and oil products as soon as possible and no later than the end of 2022.”

Renault owns about two-thirds of AvtoVaz, the Russian automaker that makes about 400,000 cars a year under the Lada brand.

AvtoVaz shut down its factories last month after warning that Mr Putin’s assault on Ukraine would lead to a supply chain crisis caused by a shortage of imported components.

Renault said at the time that its decision was motivated by a “forced change of existing logistics routes”.

Lada is a corporate symbol of the Soviet era and remains Russia’s largest automobile company, which is still partly financed by the Kremlin. Only every 10th Lada is sold outside Russia.

Renault had gradually increased its stake in AvtoVaz since 2008, before taking control in recent years of a company that employs around 40,000 people in Russia.

The French firm’s close ties make it more difficult for the company to sever its ties with Russia without suffering a significant financial blow.

Renault posted a profit of €967m (£804m) last year after plummeting to an €8bn loss in 2020 when the pandemic ravaged the car sector. AvtoVaz sales increased by 10% to 2.8 billion euros over the period.

The decision to keep its Russian operations intact comes after The Telegraph revealed that the French retail magnates behind Decathlon have decided to expand across Russia despite the crisis in Ukraine.

Leroy Merlin, the Mulliez family’s home improvement company, wants to fill the void left by Western rivals like Ikea after they withdrew from Russia.

In a letter to suppliers, bosses of Leroy Merlin’s Russian branch said “sales have increased significantly” since the start of Mr Putin’s brutal military campaign.

A Renault spokesman said: “We are monitoring the ongoing situation very closely.”

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This notice was published: 2022-03-22 18:58:35

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