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 international carmakers, suspended operations in Russia final yr after western international locations imposed unprecedented sanctions on Moscow over the battle in Ukraine.
Volkswagen has been making an attempt 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 provide Volkswagen automobiles at its manufacturing unit in Nizhny Novgorod, sought to halt to any sale as a part of a lawsuit in opposition to the German carmaker for what GAZ says is a breach of contract after Volkswagen terminated the manufacturing settlement in August.
In courtroom filings, GAZ mentioned Volkswagen’s makes an attempt to exit the Russian market put its personal pursuits in danger and it’s searching for 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, mentioned it was is within the remaining phases of a deal to promote its Russian property.
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Russia mandates that firms from “unfriendly” international locations — these which have hit Russia with sanctions — are required to win approval from a authorities fee for the sale of any Russian property.
International traders have feared Russia may transfer to nationalize strategic property because the restrictions on gross sales had been introduced in.
Final July President Vladimir Putin issued a decree to grab full management of the Sakhlain-2 fuel and oil venture in Russia’s far east, successfully taking virtually 50% of the venture from Shell and two Japanese buying and selling firms.
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 charge 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 choice to ship tens of hundreds of troops into Ukraine in February final yr.
Beforehand reliant on Western funding, tools and components, automobile manufacturing final yr fell by an unprecedented 67% to its lowest stage because the collapse of the Soviet Union.
