Russia's GAZ Group Suing Volkswagen for $348 Million
Russia’s Gorky Automobile Plant (Gorkovsky Avtomobilny Zavod or GAZ) is suing Volkswagen Group over vehicles it was contracted to assemble but never had the opportunity to after the German automaker pulled out of the market at the start of the Russo-Ukrainian War.
This is the second lawsuit launched by GAZ, with the first seeking 15.6 billion rubles ($201.3 million USD) in damages due to VW having terminated its contract for the factory located in Nizhny Novgorod.
According to Automotive News, the latest suit involves GAZ hoping to recover 28.4 billion rubles ($348 million USD) as plants have remained idle.
While the details of the lawsuit have not yet been published, documents were filed with the Nizhny Novgorod regional court on April 7th. VW has declined to comment on the matter, and likely won’t until more information about the suit becomes publicly available.
From Automotive News:
VW halted operations in Russia in March 2022, shortly after Moscow ordered tens of thousands of troops into Ukraine. A court froze the company's assets in Russia on March 17, but that order was lifted on April 3.
Volkswagen plans to sell its Russian assets including a car plant in Kaluga with a capacity of 225,000 vehicles a year, but has not yet made a decision on the disposal. It is in the process of applying for approval of the sale by Russian government agencies, VW has said.
VW plants in Kaluga and Nizhny Novgorod ceased production in March last year after the company announced the suspension of operations in Russia until further notice. In the summer the company decided to close the Nizhny Novgorod site.
It’s been quite a mess since VW formally pulled out of the region in August. In March of 2023, Russian courts agreed to freeze all of Volkswagen’s lingering assets until the dispute with GAZ has been settled — stalling any prospective sale.
The Russian subsidiary was reportedly surprised by the lawsuits, claiming in the press that the partnership had "ended on mutually-agreed terms.” Though the reality was that this all happened extremely fast after the war began and the German company just seems to want to sell Volkswagen Group Rus off to a “to a trustworthy Russian investor” without much fuss. Why it assumed the Russian government would be eager to bend over backward to help this endeavor is anyone’s guess, however.
[Image: FotograFFF/Shutterstock]
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A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Offer to negotiate face-to-face with Putin directly. At the International Criminal Court. If any down payment or progress payments were received, VW should twist the knife by announcing that all funds would be donated to Ukrainian relief.
Germany: sure, we'll pay...right after you turn the natural gas back on.