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Kremlin confiscated Swedish Volvo plant on Russian territory

Kremlin confiscated Swedish Volvo plant on Russian territory Photo: A Volvo plant confiscated on Russian territory (Getty Images)

Russian assets of the Swedish truck manufacturer Volvo were transferred to a Russian investor who remains undisclosed, according to Reuters.

Volvo suspended all sales, servicing, and production in Russia in February 2022 and stated in October of the previous year that further write-downs might be needed. In 2021, Russia accounted for approximately 3% of the group's net sales, amounting to about $33.4 billion.

The Ministry of Industry and Trade of the Russian Federation announced that, together with the new owner, they have also identified a domestic partner for the further development of production at the Kaluga site of the concern, and work is ongoing to restore it as soon as possible.

The new owner and partner have not been named, but the Russian State Register of Legal Entities reports that Volvo assets, including the Kaluga plant, are under the operational control of businessman Igor Kim.

The statement mentions that Alexey Sannikov, a business partner of Kim in the automotive trade, will head the Kaluga plant, which has a production capacity of around 15,000 trucks per year.

The exodus of automakers from Russian territory

Volvo is one of many Western firms that have divested from their subsidiaries and plants in Russia, usually at significantly reduced or symbolic prices, as doing business became untenable following Moscow's invasion of Ukraine in early 2022.

The invasion triggered a series of Western economic sanctions and threats from Russia to seize Western companies based there.

Volvo is joining automakers Volkswagen, Mercedes-Benz, Nissan, Toyota, Renault, BMW, Kia, and Hyundai in ceasing production in Russia, while some plants have been reconfigured to produce Chinese vehicles, filling the market void left by Western firms.