Renault shares fell early on Thursday after the French carmaker announced it was suspending operations at its plant in Moscow while Russian partner Avtovaz vowed to cut its reliance on imported components.
Renault shares fell as much as 2.2 percent before paring losses to trade flat at 0847 GMT, lagging France’s CAC 40 blue chip index which was up 0.6 percent.
The Western carmaker most exposed to the Russian market, Renault said on Wednesday it would assess the value of assets affected by its decision later this year.
Last year those assets were valued at 2.2 billion euros ($2.42 billion), it said.
Renault also said it would assess its options regarding its majority stake in Avtovaz, Russia’s No. 1 carmaker.
Avtovaz said on Thursday it would manufacture new models with reduced exposure to imported components and do its best to restore supply chains.
Ukrainian President Volodymyr Zelenskiy on Wednesday accused Renault of financing the war. The foreign minister later in the day welcomed Renault’s move.
“What we ask French companies is to apply the sanctions,” French government spokesman Gabriel Attal told RMC radio on Thursday, reiterating Paris’ position that it was up to businesses to decide on their presence in Russia. The government owns a 15 percent stake in Renault.
“We think this strategic move will shift the attention of investors into the core operations of Renault which have been largely restructured over the past years,” JP Morgan analysts said in a note.
Credit Suisse in a note said that potentially exiting Russia for Renault would be a better option than taking a “wait and see” approach, even if it comes at a cost for the company.