Renault gives up its stake in Avtovaz, parent firm of Lada, as western brands continue to cut ties with Russia

French firm Renault has announced it will be transferring its 68 per cent stake in Avtovaz, Russia’s biggest carmaker best-known for its Lada brand, to an auto research institute for a symbolic single rouble – the equivalent of 1.2 pence.

The deal was first reported by Russian news agencies citing the country’s Trade Minister, Denis Manturov, who also announced that Renault’s factory in Moscow – which produces cars under the Renault and Nissan brands – will be passed to the city’s government.

The moves are likely to build on concerns that Russian firms and institutions are buying up prized assets for bargain sums, as Western companies rush to comply with sanctions over the Ukraine conflict, as well as threats from the Kremlin that foreign-owned assets may be seized.

The Russian government is drawing up legislation that could see control of foreign companies handed over to external local management and make it a criminal offence for foreign executives and companies to implement sanctions.

The Russian invasion of Ukraine on February 24 has prompted a mass corporate exodus from Russia, with more than 750 companies announcing the curtailing of operations there. Renault, the Western carmaker most exposed to Russia, said last month it would suspend operations at its Moscow plant and was considering a 2.2 billion euro (£1.85 billion) non-cash write-down to reflect the potential costs of the suspension.

Low-volume UK imports of the all-wheel drive Lada Niva – which recommenced last year via Mark Key of – ceased in February, following Russia’s invasion of Ukraine.

The next-generation Niva, which was expected to use the platform of the Dacia Duster (another Renault subsidiary) will now be under threat, as will all future Lada models intended for Renault/Dacia platform sharing.