Russian automaker sues Volkswagen.

GAZ, the car manufacturer, has filed a lawsuit against Volkswagen (Germany), demanding 15.6 billion rubles (US$200 million) in compensation for leaving the Russian market, which they claim affected their interests.

The lawsuit was filed on May 5th at the Nizhny Novgorod City Court (Russia). This is the third time this year that GAZ has sued Volkswagen. In the two previous cases, they sought a total of $545 million in damages, alleging that the German automaker's departure from the Russian market affected their interests.

GAZ used to manufacture vehicles for Volkswagen at its Nizhny Novgorod plant. However, Volkswagen terminated the production agreement between the two companies in August 2022.

New cars at Volkswagen's Kaluga plant in Russia, March 2022. Photo: Reuters

Initially, GAZ tried to persuade the court to freeze Volkswagen's assets in Russia pending trial. In March, a Russian court agreed to this. However, the freezing decision was overturned last month.

Volkswagen and many other foreign car manufacturers ceased operations in Russia last year, following Western sanctions against Russia over the conflict in Ukraine. Both of their plants in the cities of Kaluga and Nizhny Novgorod stopped production in March 2022. The Kaluga plant had an annual production capacity of 225,000 vehicles.

In March, Volkswagen's Russian subsidiary said it was surprised to be sued. They asserted that the cooperation agreement between the two parties "termended according to the agreed terms."

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

Last year, French automaker Renault sold a large stake in Russian carmaker Avtovaz to a state-owned company for a symbolic price of 1 ruble. This meant they agreed to relinquish an asset once valued at 2.2 billion euros (2.35 billion USD).

Ha Thu (according to Reuters)

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