Volkswagen planning to exit Russia business, looking for buyers: Report

Volkswagen could be the latest foreign carmaker to shut down its business in Russia. According to German media reports, the carmaker is looking for buyers to sell off its business worth in billion amid raging war between Russia and Ukraine. According to sources, Volkswagen is feeling the pinch of the war and is finding it difficult to resume operations every time strain between the two countries escalates. Recently, Japanese carmaker Nissan wrapped up its Russia business and sold off its facility.

German newspaper Frankfurter Allgemeine reported that the Volkswagen group is looking for an investor to sell off its factory in Russia. The reports quoted a source inside the German auto giant, saying, "With each escalation in the conflict, the probability that we will be able to produce there again in the near future decreases." According to the German media, the investors looking to buy the facility include Chinese and Russian companies.

The German auto giant has its Russian facility located in Kaluga. The facility, which was set up at an investment of one billion euro, manufactures cars like the Volkswagen Tiguan and the Skoda Octavia. Volkswagen had started operations at the Kaluga facility in Russia back in 2009. After Russia decided to invade Ukraine earlier this year, Volkswagen was among several foreign carmakers who suspended production in the country.

Recently, Volkswagen also ended its partnership with local manufacturer called Gaz, which produced some of the Volkswagen models for Russian market.

If Volkswagen decides to leave Russia, it will follow French auto giant Renault and more recently Japanese carmaker Nissan. Renault made its exit from Russia in May this year, selling off its Russian subsidiary to the Moscow municipality. It also sold its stake in Avtovaz to a Russian state body for a token amount of one euro, recording an overall loss of 2.2 billion euros. Nissan too incurred loss of $687 million as it sold the Russian business for just one euro.

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