Renault shares crushed by concerns about carmaker's Russia exposure

[LONDON] Shares of Renault, the European carmaker most exposed to Russia, tumbled to their lowest close since November 2020 as countries around the world escalate measures to penalise President Vladimir Putin for invading Ukraine.

The manufacturer's shares fell 11 per cent in Paris trading Tuesday (Mar 1), dropping its market valuation to less than 7.5 billion euros (S$11.3 billion) for the first time in almost 16 months. The stock has plummeted 37 per cent since Feb 16.

Russia is Renault's second-biggest market, with the automaker generating about 5 billion euros annually, roughly 12 per cent of its automotive revenue, according to Bloomberg Intelligence. BMW, Mercedes-Benz Group and Volkswagen only have about 2 per cent of their sales at risk, BI analyst Michael Dean said in a note last week.

The US, UK, European Union and Asian nations have ramped up sanctions against Russia, contributing to a record plunge for the rouble. VW's Russia unit has temporarily suspended deliveries of vehicles to dealers until further notice, while Daimler Truck Holding halted operations and may review ties with local joint venture partner Kamaz PJSC.

Renault's Avtovaz venture restarted assembly lines Tuesday at its plant in Togliatti following a brief shutdown due to a shortage of semiconductors, according to a spokesman. The French company's own plant in Moscow remains idle until Mar 5 due to supply issues.

A Renault spokesperson declined to comment on how sanctions will affect operations.

Russia's war in Ukraine also is leading to ripple effects elsewhere in Europe. VW will idle some production lines in Wolfsburg - the world's largest car plant - next week before a broader shutdown the following week. BMW also expects imminent manufacturing halts and is finalising plans for various locations, a spokesperson said. BLOOMBERG