Russia relaunches production of Soviet-era Moskvich at ex-Renault plant

After a two-decade hiatus, Russia on Wednesday relaunched production of the Soviet-era Moskvich brand at a plant near Moscow given up by the French carmaker Renault, Russia's industry and trade ministry said. Renault sold its majority stake in carmaker Avtovaz in May to the Russian state for reportedly just one rouble, but with a six-year option to buy it back.

After a two-decade hiatus, Russia on Wednesday relaunched production of the Soviet-era Moskvich brand at a plant near Moscow given up by the French carmaker Renault, Russia's industry and trade ministry said.

Renault sold its majority stake in carmaker Avtovaz in May to the Russian state for reportedly just one rouble, but with a six-year option to buy it back. It sold its plant, now renamed the Moscow Automobile Factory Moskvich, for another rouble. With just 600 vehicles slated for production this year, the relaunch is unlikely to alter the gloomy outlook for the wider industry, whose annual sales could end the year below 1 million for the first time in Russia's modern history.

The ultimate target of producing 100,000 Moskvich vehicles a year, some of which will be electric, is far below the industry average for a car plant of between 200,000-300,000. Tesla makes 22,000 cars a week at its Shanghai plant. "The first Moskvich cars will come off the production line in December 2022," truck maker Kamaz, the plant's technological partner, said in a statement.

The revived Moskvich ("Muscovite") may be returning with a twist. Sources have told Reuters that Chinese carmaker JAC's design, engineering and production platform will be used to produce the brand. Western sanctions over Moscow's military campaign in Ukraine have sorely hampered access to foreign-made components, while many foreign car manufacturers have left. Kamaz and the government have established new supply chains, but not disclosed details.

"The task for the near future is to establish small-node assembly processes with the involvement of local suppliers by the end of 2023," Industry and Trade Minister Denis Manturov said in a statement. The ministry said the launch of full-scale production would provide jobs for around 40,000 more people.

Sales of the Moskvich 3, described as an urban crossover with a petrol engine and either automatic or manual gearbox, will begin in December, the ministry said.

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