A Russian courtroom on Monday froze all Volkswagen property in Russia, within the newest impediment to the German carmaker’s year-long efforts to wind down its Russian operations.
Volkswagen, together with different overseas carmakers, suspended operations in Russia final yr after western nations imposed unprecedented sanctions on Moscow over the battle in Ukraine.
Volkswagen has been attempting to promote its Russian property, together with its flagship plant within the metropolis of Kaluga, which has manufacturing capability of 225,000 automobiles a yr and has been furloughed since March 2022.
Russian auto producer GAZ, which was contracted to supply Volkswagen automobiles at its manufacturing unit in Nizhny Novgorod, sought to halt to any sale as a part of a lawsuit towards the German carmaker for what GAZ says is a breach of contract after Volkswagen terminated the manufacturing settlement in August.
In courtroom filings, GAZ stated Volkswagen’s makes an attempt to exit the Russian market put its personal pursuits in danger and it’s in search of 15.6 billion roubles ($201.3 million) in damages over the terminated contract.
A Russian courtroom on Monday agreed to freeze all of Volkswagen’s property in Russia whereas the dispute with GAZ performs out, courtroom paperwork confirmed, additional hitting VW’s makes an attempt to wind down its Russian operations.
GAZ declined to remark. Volkswagen and Russia’s business ministry didn’t reply to requests to remark.
Earlier this week, Czech carmaker Skoda Auto, a part of the Volkswagen Group, stated it was is within the ultimate levels of a deal to promote its Russian property.
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Russia mandates that corporations from “unfriendly” nations — these which have hit Russia with sanctions — are required to win approval from a authorities fee for the sale of any Russian property.
International buyers have feared Russia might transfer to nationalize strategic property for the reason that restrictions on gross sales have been introduced in.
Final July President Vladimir Putin issued a decree to grab full management of the Sakhlain-2 gasoline and oil mission in Russia’s far east, successfully taking nearly 50% of the mission from Shell and two Japanese buying and selling corporations.
Different main Western carmakers have left the Russian market. Final yr France’s Renault bought its majority stake in Avtovaz to a Russian state entity for a symbolic price of 1 rouble — successfully writing off property it beforehand valued at 2.2 billion euros ($2.35 billion).
Russia’s auto business has been one of many worst hit by Moscow’s resolution to ship tens of 1000’s of troops into Ukraine in February final yr.
Beforehand reliant on Western funding, tools and elements, automotive manufacturing final yr fell by an unprecedented 67% to its lowest stage for the reason that collapse of the Soviet Union.
