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HomeEuropean NewsEx-Magna CEO may take management of Volkswagen’s property in Russia 

Ex-Magna CEO may take management of Volkswagen’s property in Russia 

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

In accordance with individuals accustomed to 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, below a unique model. VW will proceed to produce elements and spare elements to Russia in addition to present engineering companies and thus preserve benefiting from the Russian market. The manufacturing websites can be managed by Russia’s automaker GAZ Group owned by Wolf’s long-time Russian enterprise accomplice Oleg Deripaska (presently below EU, US and UK sanctions). In 2010-2019 Siegfried Wolf himself chaired the board of GAZ Group and in line with some media experiences had a minority stake within the firm.

Volkswagen has been manufacturing autos in Russia since 2007 on its meeting plant in Kaluga, 170 km southwest of Moscow. The mannequin vary contains 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 complete investments in Russia exceeded EUR2 billion.

In 2021 VW offered round 199,000 autos 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 autos 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 a scarcity of severely restricted availability of elements from suppliers. Because of this automobile gross sales in Russia plunged greater than 80% in Could hitting the bottom degree since 2006.

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

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

In Could France’s Renault offered its Russian property to the Russian authorities for symbolic one ruble with the decision again choice 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 property, however there have been no developments up to now.

Whereas the scale and particulars of the potential Volkswagen – Steyr deal are nonetheless unknown it may 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 give up Russia – an ethical pledge for a serious EU firm in a response to Russia’s invasion of Ukraine – whereas preserve benefiting from the Russian market by supplying its elements and spare elements and offering engineering companies.

However then there’s an apparent moral query. Oleg Deripaska, as soon as the richest particular person in Russia, is nicely referred to as a member of Putin’s interior 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 can 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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