Former Partner Wins Lawsuit Against Volkswagen Russia
Volkswagen Russia has had its assets confiscated after a lawsuit filed by former partner Gaz was accepted by a court in Nizhny Novgorod on the Volga. The court ordered the confiscation of Volkswagen Russia’s assets, with the application to annul the termination of the assembly contract and to order Volkswagen to pay a contractual penalty of 15.6 billion rubles (190 million euros).
Withdrawal Due to Sanctions Against Russia
Gaz was Volkswagen’s manufacturing partner in Russia until last year, with several VW and Skoda models being assembled at the Nizhny Novgorod factory. However, after US sanctions against Gaz came into force in May, Volkswagen officially withdrew from the joint production and offered employees a severance package.
Production at the Nizhny Novgorod plant was stopped shortly after the start of the Russian war of aggression against Ukraine, as was the case at VW’s own plant in Kaluga, 150 kilometers south of Moscow.
Negotiations for Sale
It has recently become known that Volkswagen is negotiating the sale of its plant and other assets in Russia. Car dealer group Avilon was considered a potential buyer, but such deals must be approved by the Russian government.
Overall, the lawsuit filed by Gaz and the subsequent confiscation of Volkswagen Russia’s assets serves as a reminder of the potential consequences for companies that withdraw from partnerships without fulfilling contractual obligations.