Volkswagen Sells Russian Shares And Factory To Local Investor
Volkswagen has announced officially it has sold its shares in Russia and is leaving the country. The German brand has reached an agreement with Art-Finance LLC, which is supported financially by the local dealer Avilon. All of VW’s local subsidiaries – Volkswagen Components and Services LLC, Scania Leasing LLC, Scania Finance LLC, and Scania Insurance LLC – will be transferred to the investor.
The automaker has issued a short press release confirming the deal has been approved by the Russian government. There’s no word about the sales price in the statement, though reports claim Avilon paid around $135 million for VW’s Russian business. Probably Volkswagen’s most important activity in the country – its production facility in Kaluga – is also part of the deal. The entire importer structure with distribution and sales business with associated employees is now owned by the local investor.
Volkswagen reportedly invested more than $800 million to build the Kaluga plant back in 2007 and the $135 million it will allegedly receive with the sale cover only a fraction of the money it invested. However, given the recent problems VW had with the local authorities, the deal could be considered a happy outcome for the automaker.
Two months ago, it became clear that a Russian court froze all Volkswagen assets in the country due to a deal it had with GAZ, a local light commercial vehicle manufacturer. Volkswagen reportedly ended its agreement with the firm in August but GAZ responded by suing the Germans for the equivalent of $201.3 million for allegedly breaking their arrangement. Volkswagen stopped producing and selling cars in the country shortly after the Russian invasion of Ukraine started but selling its business proved to be a much more difficult task.
Also waiting for final approval from the government is Hyundai which has been in talks with a Kazakh company to acquire its assets in Russia. The deal has reportedly been signed between the two parties but the government needs to approve it before it goes official.
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