RENAULT has done an about turn after last week announcing it would ignore foreign-owned business shutdowns in Russia and resume car production at its Moscow plant.

Under pressure and global scrutiny, it has now said it will close its Moscow plant that makes Renault, Dacia and Nissan models. It is “assessing” its stake in Russian partner AvtoVAZ which makes vehicles including Lada.

Renault is responsible for the employment of 45,000 people in Russia.

It is the second time in less than a month that the majority French government-owned car-maker has changed its mind.

A Renault spokesperson told Reuters that in late February it suspended operations at the factories – which make the Renault/Dacia Duster, Renault Kaptur and Arkana, and Nissan Terrano models – because of “forced change in existing logistics routes”.

It has also blamed the temporary closure on component shortages.

“The situation with components supply is unstable and changing, we prefer not to make any predictions” about the production status, Reuters said quoting a spokesperson for Renault Moscow.

The French-based board of Renault, majority owned by the French government, last week stated it has decided to keep its presence intact in Russia.

It said it was complying with international sanctions and with the backing of its main shareholder, the French government, two sources close to the matter told Reuters.

Now, Renault activities in its manufacturing plant in Moscow are suspended as of March 24.

In its latest statement, Renault said: “Regarding its stake in AvtoVAZ, Renault Group is assessing the available options, taking into account the current environment, while acting responsibly towards its 45,000 employees in Russia.”

Renault has since 2016 had a controlling two-thirds stake in Russian carmaker Avtovaz, making it more exposed than its rivals to the Russian market.

More than 45,000 people in Russia work for Renault and its associates and partners. The country accounts for eight per cent of Renault’s core earnings, according to Citibank.

Lada maker AvtoVAZ, which is controlled by Renault, said on March 21 that it is partially halting production at its Russian plants in Togliatti and Izhevsk because of shortages of electronic parts.

Renault reopened its plant at a time when many international companies were closing their businesses in Russia because of sanctions and public pressure linked to the country’s invasion of Ukraine.

More than 400 companies, including Apple, Coca-Cola, and McDonald’s, have reduced or halted operations in Russia since the war began, according to researchers at Yale University in the US tracking the trend.

Foreign carmakers including Volkswagen and Toyota have also suspended production and exports.

Meanwhile Robert Bosch said it is curtailing its operations in Russia after learning that its parts may have been used for “non-civilian” purposes in violation of its policies.

Bosch has halted deliveries of truck components to Russian customers pending an investigation into how the parts are being deployed, the Stuttgart-based supplier said in a statement on March 18.

The company is probing the use of its products after Ukraine’s foreign minister Dmytro Kuleba said on March 20 that Ukraine had found Bosch parts in Russian military vehicles.

“We take the Ukrainian foreign minister’s allegations very seriously and immediately initiated an intensive investigation,” the company said, adding that any parts were not supplied directly to the manufacturer of the military vehicles.

Bosch – which had sales in Russia of $A1.8 billion in 2021 – said it anticipates suspending production completely in all its Russian factories. The company employs about 3500 people in Russia at three locations.

Germany’s economy ministry has launched an investigation into whether Bosch violated an export ban on goods that can be used for both civilian and military purposes, Der Spiegel magazine reported on March 18.

European Union sanctions have restricted exports of dual-use goods since Russia’s annexation of Crimea in 2014.

More sanctions have been imposed since Moscow’s invasion of Ukraine.

Bosch said it had no knowledge that any official investigation into its actions had started.

By Neil Dowling