Employees work on the assembly line at a plant of French multinational automobile manufacturer Renault in Moscow in 2016Image source, Getty Images

Following pressure over its continued presence in the country, the French company is selling its majority stake in Avtovaz.

The French car company said it would sell its interest in Russia to a science institute in Moscow.

Moscow said that the assets of the French company had become state property.

It is the first major foreign business that has been nationalised by Russia.

Russia's industry and trade ministry said that agreements were signed on the transfer of Russian assets of the Renault Group to the Russian Federation.

Russian Industry and Trade Minister Denis Manturov said in April that Renault would sell its Russian assets for one symbolic rouble.

In a statement on Monday, the group said that it had approved agreements to sell its stake in Avtovaz to the Russian Central Research and Development Automobile and Engine Institute.

The Avtoframos plant, which makes Nissan and Renault models, was included in the deal.

Moscow mayor Sergei Sobyanin said the plant would resume production under the Moskvich brand.

Luca de Meo said that they had taken a difficult but necessary decision, and that they were making a responsible choice by keeping the group's performance and ability to return to the country in the future.

An option for the group to buy back its interest in Avtovaz for six years is included in the agreement.

The Lada brand is popular in Russia and Avtovaz makes it.

In March, the company said it was suspending operations in Moscow.

It came after the President of Ukraine called on French companies to leave Russia, accusing them of financing the murders of women and children.

Analysis box by Theo Leggett, business correspondent

Luca de Meo said the firm was making a responsible choice, but how much choice did it actually have?

In the early stages of the conflict, the company chose to remain in Russia while other brands left.

It was suspended in late March after Zelensky said that Western firms in Russia were helping to finance the war.

Abandoning its Russian business will be costly. It will lose a key avenue for growth. It will lose Lada, a brand that was central to the strategy for affordable cars.

It is possible that Renault could not remain in Russia. The damage to its reputation has already been done.

Hundreds of international brands including Starbucks, Coca Cola, Levi's and Apple have left Russia since the country invaded Ukraine in February, with many now looking to sell their businesses in the country.

Moscow warned that it may nationalize production plants where work has been stopped.

  • Russia-Ukraine war
  • Russia
  • Renault