Emmanuel Macron under fire as Renault resumes Russian production

Emmanuel Macron’s government has come under fire for backing Renault’s decision to buck a Western boycott of Russia.

Tom Tugendhat, chairman of the Commons foreign affairs committee, said the French car maker’s decision to restart manufacturing in Moscow would only “cushion” the Russian economy from the impact of Western sanctions. 

The company behind the Clio and Kadjar models was forced to halt production last month over logistical problems caused by Vladimir Putin’s invasion of Ukraine.

However, Renault has been given the blessing of its largest shareholder, the French government, to continue operating in Russia despite a widespread backlash from western businesses.

Mr Tugendhat criticised Renault’s decision, saying the past few weeks had shown there was strength in numbers.

“The response to Russia’s barbaric invasion of Ukraine has been phenomenal and huge sacrifices have been made,” he added. “Western countries have issued sanctions that are unprecedented in their scope and scale but we must hold firm. 

“Renault restarting production only cushions the Russian economy against the impact of the West’s sanctions.”

Mr Macron has been spearheading an ill-fated attempt to play peacemaker with Mr Putin, who has continued to bombard Ukraine despite the French president’s efforts to secure a ceasefire.

His talks with the Russian leader has prompted criticisms that his strategy has now failed and his attempts to maintain widespread peace in Europe were playing into the Kremlin’s hands.

Renault’s decision came as TotalEnergies vowed to stop buying oil and petrol from Russia despite holding minority stakes in the nation’s energy companies, including Novatek, Yamal LNG, Arctic LNG 2 and TerNefteGaz. 

The French state-backed oil giant said: “Given the worsening situation in Ukraine and the existence of alternative sources for supplying Europe, TotalEnergies has unilaterally decided to no longer enter into or renew contracts to purchase Russian oil and petroleum products, in order to halt all its purchases of Russian oil and petroleum products as soon as possible and by the end of 2022 at the latest.”

Renault owns about two thirds of AvtoVaz, the Russian automotive manufacturer that makes about 400,000 cars a year under the Lada brand.

AvtoVaz brought its plants to a halt last month after warning that Mr Putin’s assault on Ukraine would lead to a supply chain crunch caused by a shortage of imported components.

Renault said at the time that its decision was caused by a “forced change in existing logistic routes”.

Lada is a corporate symbol of the Soviet era and remains Russia’s largest automotive company, which is still part-funded by the Kremlin. Only one in 10 Ladas are sold outside Russia.  

Renault had been gradually increasing its stake in AvtoVaz since 2008, before taking control of a business in recent years that employs around 40,000 people in Russia.

The French firm’s strong corporate ties make it harder for the company to cut loose its ties in Russia without suffering a significant financial hit.  

Renault posted a €967m (£804m) profit last year after sinking to an €8bn loss in 2020 when the pandemic ravaged the automotive sector. AvtoVaz sales rose by 10pc to €2.8bn over the period. 

The decision to keep its Russian operations intact comes after The Telegraph revealed that the French retail tycoons behind Decathlon have moved to expand across Russia despite the crisis in Ukraine.

Leroy Merlin, the home improvement firm owned by the Mulliez family, wants to fill the vacuum left by western rivals such as Ikea after they pulled out of Russia.

In a letter to suppliers, the bosses at the Russian arm of Leroy Merlin said that “sales have significantly increased” since the start of Mr Putin’s brutal military campaign.

A Renault spokesman said: “We are following the ongoing situation very carefully.”

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