LONDON, March 24 (Reuters Breakingviews) - Renault (RENA.PA) is reversing out of Russia, with a 2.2 billion euro dent in its bonnet. The French carmaker’s exit, which involves a near-total write-off of its investment in the country, winds the clock back on Chief Executive Luca de Meo’s strategic turnaround after years of losses and conflicts with Japanese partner Nissan Motor (7201.T). But the alternative – staying put – was grimmer read more . Renault would have been cobbling together cars without crucial imported components. It would then have been trying to sell them into an economy set to shrink 10% or more this year.
The 7 billion euro group controls a third of Russia’s car market. It will now have to accept whatever Moscow decides for the three plants it is closing – one makes cars under its own brands; the two others produce the country’s famous Lada marque. President Vladimir Putin has threatened to take over the assets of companies from “hostile countries” threatening to leave. Renault could become the first example of how he plans to pull it off. (By Pierre Briancon)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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