Volkswagen Officially Exits Russia, Sells its Factory to a Local Dealer

It was reported in October last year that German auto giant Volkswagen is considering making an exit from Russia following the footsteps of many international carmakers that exited the country after the Russian invasion of Ukraine in early 2022.

Now VW has officially withdrawn from Russia selling all the shares of its subsidiaries as well as its large factory in Kaluga, southwest of Moscow. As per reports, Volkswagen struck a deal with a Moscow-based dealership named Avilon. An official sales price has not been announced but reports state Avilon paid approximately €125 million ($135 million) to acquire VW’s Russian operation and its Kaluga plant which has enough capacity to build 225,000 vehicles a year.

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Volkswagen spent €774 million to build the Kaluga plant which became operational in 2007 before reaching full-scale production in 2009. VW ceased operations at the site shortly after Russia’s invasion of Ukraine in February 2022. The 4,000 employees at the factory have remained on payroll ever since while waiting on information about the company’s future in Russia.

Related: Geely Defends Chinese Car Brand’s Sales Push in Russia

It is unclear whether Volkswagen’s agreement with Avilon includes a provision allowing it to return to Russia. Bear in mind, Renault agreed to sell its 68% ownership in Russian automaker AvtoVAZ for 1 ruble last year, but the agreement contains the possibility for the company to resume operations in the future if it so decides.

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