Russian car company sues Volkswagen

Car manufacturer GAZ has just filed a lawsuit against Volkswagen (Germany), demanding compensation of 15.6 billion rubles (200 million USD) for leaving the Russian market, affecting their interests.

The lawsuit was filed on May 5 at the Nizhny Novgorod City Court (Russia). This is the third time this year that GAZ has sued Volkswagen. The previous two times, they demanded a total of $545 million in damages, accusing the German carmaker of leaving the Russian market of affecting their interests.

GAZ used to produce cars for Volkswagen at its plant in Nizhny Novgorod. However, Volkswagen terminated the production agreement between the two parties in August 2022.

New cars at Volkswagen's factory in Kaluga (Russia) in March 2022. Photo: Reuters — New cars at Volkswagen's factory in Kaluga (Russia) in March 2022. Photo: *Reuters*

GAZ initially asked the court to freeze Volkswagen's assets in Russia pending trial. A Russian court agreed in March. However, the freeze was overturned last month.

Volkswagen and several other foreign carmakers have been operating in Russia since last year, after the West imposed sanctions on Russia over the war in Ukraine. Both of its factories, in the cities of Kaluga and Nizhny Novgorod, have been shut down since March 2022. The Kaluga plant has an annual capacity of 225,000 vehicles.

In March, Volkswagen's Russian subsidiary said it was surprised by the lawsuit, saying the partnership had been "terminated on agreed terms."

Volkswagen is still preparing to sell its assets in Russia. It closed its facility in Nizhny Novgorod last summer. However, no official decision has been made. Russian authorities have not yet given it permission to sell.

Last year, French carmaker Renault sold a majority stake in Russian carmaker Avtovaz to a state-owned company for a nominal sum of 1 ruble, giving up assets once valued at 2.2 billion euros ($2.35 billion).

Ha Thu (according to Reuters)

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