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Moscow Revives Soviet-Era Moskvich Car as Renault Leaves Russia

Bloomberg logo Bloomberg 5/16/2022 Bloomberg News
Vintage Moskvich automobiles. © Corbis/VCG via Getty Images Vintage Moskvich automobiles.

(Bloomberg) -- Russia is going back to the future and reviving a legendary Soviet-era car brand, Moskvich, to save jobs at a Moscow car plant sold by French auto maker Renault.

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“The foreign owner decided to close the Moscow Renault plant. That’s its right, but we cannot allow thousands of workers to be left without work,” Moscow Mayor Sergey Sobyanin said on his blog Monday. “I decided to take the plant as city property and resume production of passenger cars under the historic Moskvich brand.”

Renault announced the disposal of the Avtoframos plant alongside the sale of its 68% stake in Russian carmaker AvtoVAZ PJSC in response to President Vladimir Putin’s invasion of Ukraine. Facing unprecedented international sanctions in response to the war, Putin has emphasized a move toward Soviet-style self-sufficiency to keep the economy functioning amid forecasts the country’s facing the deepest slump in nearly three decades this year.

Sobyanin’s announcement marks a return to the factory’s origins, since the Moscow Renault plant began initially as a joint venture with the city government at the former Moskvich plant in 1998. AvtoVAZ produces the Lada, a brand that also dates back to the Soviet Union and was the object of endless jokes about reliability and delivery delays.

Video: Renault sells Russia stake for one rouble (Reuters)

The Moskvich plant produced Ford cars when it first began operating in the 1930s before switching to its own brand after it acquired an Opel factory manufacturing line from Germany shortly after World War II. It became one of the Soviet Union’s most popular brands of car for decades.

After the collapse of the Communist state in 1991, the plant struggled on for a decade before declaring bankruptcy in 2002 and later going into liquidation. Renault started production at the plant in 2005 and then acquired the stake in AtvoVAZ, Russia’s biggest car manufacturer. 

The Moscow Renault plant made models including Duster, Kaptur and Nissan Terrano for the Russian market and had capacity to make about 180,000 cars per year. Sobyanin said the city government plans to produce classic cars and later electric vehicles at the factory, and is working with the Kamaz truck manufacturer and the Industry Ministry to localize parts production amid the sanctions.

“In 2022, we will open a new page in the history of Moskvich,” Sobyanin said. 

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