The plans of Volkswagen, the German car manufacturer, to withdraw from Russia have hit a snag after a court suspended its assets in the country while awaiting a lawsuit.
Gaz Group, owned by Oleg Deripaska, a sanctioned oligarch, filed a lawsuit against VW as the latter wants to terminate their collaboration that was supposed to last until 2025. VW had contracted GAZ, the Russian auto manufacturer, to produce Volkswagen vehicles at its Nizhny Novgorod factory.
Last year, Volkswagen and other foreign carmakers had to halt their operations in Russia after western countries imposed unprecedented sanctions on Moscow over the conflict in Ukraine. VW has since been trying to sell its Russian assets, including its flagship plant in Kaluga, which had a workforce of over 4,000 people and a production capacity of 225,000 vehicles annually.
GAZ argued in court that Volkswagen’s decision to exit the Russian market is putting its own interests at risk and is seeking damages worth 15.6 billion roubles ($201.3 million) over the terminated contract. Meanwhile, a Russian court froze all of Volkswagen’s assets in the country to await the resolution of the lawsuit, further complicating the situation as VW tries to wind down its operations in Russia.
Volkswagen’s Russian subsidiary said it was surprised by the lawsuit and their partnership had “ended on mutually-agreed terms”.
