French car giant faces $110 million lawsuit in Russia

Renault suspended operations in the country last March amid the Western sanctions

Russian car dealerships are seeking 8.5 billion rubles ($110 million) in compensation from Renault due to losses they claim they incurred as a result of the departure of the French auto brand from the country, RIA Novosti reports.

According to the report on Thursday, citing the Russian Automobile Dealers Association, on May 2, a group of Russian Renault dealers sent the proposal to Renault France, addressed to the company’s president, Jean-Dominique Senard.

The dealer association’s president, Aleksey Podshchekoldin, told RIA this was the second attempt to reach an agreement on compensation in a pre-trial order.

Podshchekoldin said this agreement would be the best compromise, given the loyalty to the Renault brand in Russia and the long history of cooperation. According to him, over 2 million cars have been sold in 20 years at the country’s more than 150 dealerships.

If the sides fail to reach an agreement, the dealers are prepared to take the case to court, which would result in reputational costs for Renault and difficulties for the brand to eventually return to Russia, the association warned.

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The French automaker officially left the Russian market in mid-May, after suspending operations last March. Senard called the decision painful but necessary to protect Renault’s Russian employees. The company sold its 100% stake in Renault Russia and its 68% stake in Russian carmaker AVTOVAZ. Renault’s assets were later transferred to Russian state ownership.

The car giant reported a write-down of over $2 billion as a result of the withdrawal from its second-biggest market.

In November, Russia launched production of an updated version of the iconic Soviet-era car brand Moskvich at the former Renault plant in Moscow.

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