Volvo assets in Russia transferred to local investor, Russian partner to be brought into automobile plant - ministry
MOSCOW. Sept 8 (Interfax) - The Russian Industry and Trade Ministry has identified the investor to receive the assets of Swedish automaker Volvo in Russia and will bring a Russian partner into its automobile plant in Kaluga, the ministry's press service told Interfax.
"The assets of the Volvo automobile concern in Russia have been transferred to a Russian investor. The Industry and Trade Ministry, together with the new owner, has also identified a local partner to develop production at the concern's Kaluga site, while efforts continue to restart it as soon as possible," the ministry said.
Earlier on Friday, it was reported that several subsidiaries of the Swedish automaker in Russia, including the truck plant in Kaluga, had passed to the operational control of the businessman Igor Kim, according to the Unified State Register of Legal Entities.
According to the register, Alexei Sannikov, Kim's business partner in the auto retail industry and first deputy CEO of the businessman's Expobank, became the general director of the Volvo Trucks plant JSC Stokov Machinery Equipment, formerly JSC(N) Volvo Vostok. AB Volvo with 75% and Volvo Trucks Region CE Gmbh 25% are still listed as co-owners of the company.
According to SPARK-Interfax, the plant's revenue in 2021 was almost 69 billion rubles and net profit was 8.6 billion rubles. The figures fell to 24 billion rubles and 2.2 billion rubles, respectively, in 2022.
Volvo AB's leasing company LLC Stokov Financial Services, formerly LLC Volvo Finance Service Vostok which specialized in financial leasing of Volvo and Renault trucks, buses and construction equipment, was headed by another of Kim's associates, the investment banker and co-founder of the ExpoCapital fund Nikita Ryauzov, who previously worked at Otkritie, MDM Bank and Zenit Bank. LLC Stokov Finance, formerly Volvo Finance Vostok, controlled by this company, also came under his management.
LLC Stokov Financial Services is still owned by the Swedish concern's VFS International AB with 99.88% and Volvo Financial Services GmbH with 0.11%.
The leasing company's turnover, according to SPARK-Interfax, was almost 32 billion rubles in 2021, and net profit was 2.9 billion rubles, falling to 13 billion rubles and 1.3 billion rubles, respectively, in 2022.
According to the Unified State Register of Legal Entities, Kim has at the moment direct control only of one of Volvo's Russian subsidiaries - LLC Stokov Construction, formerly LLC Volvo Construction Equipment Vostok, with symbolic nominal financial results. The company specializes, among other things, in the production, leasing and sale of special-purpose machinery. LLC Aston Group controlled by Kim, received 99% of the company on September 6, according to the register; the co-owner of the remaining 1% is a legal entity controlled by the Kaluga automobile plant.
Kim's spokesperson declined to comment on questions about transactions with the Volvo assets.
The Kaluga region governor, Vladislav Shapsha, said on Thursday that all the largest automobile plants in the region, including Volvo Trucks, would continue to operate. "Decisions have been made on all three plants: the former Volkswagen, Volvo and PSMA Rus," he said at a meeting with students at the Kaluga State University, without going into detail.
The Volvo Trucks plant in Kaluga, with a capacity of 15,000 trucks per year, stopped producing trucks after the start of the military operation in Ukraine and European sanctions were imposed against Russia, and is idle. The enterprise sold around 5,700 vehicles in 2021.
Volvo said in a Q2 2023 report that an impairment provision of SEK 4.1 billion or 36.2 billion rubles at the current rate was formed in Q1 2022 from Russia-related assets valued at almost SEK 9 billion or 79.5 billion rubles. The concern also said there was a likelihood of asset write-offs and possible negative consequences for its finances in this regard.
Volvo Group is thinking of selling its Russian business, the Vedomosti newspaper said in October last year. "Volvo Group cannot conduct operations in Russia in the current situation, so it has been decided to adapt the business and start reducing the number of employees," a company representative told the paper.
According JSC Stokov Machinery Equipment reporting for 2022, the company's headcount decreased from 612 to 121.
Volvo trucks were Russia's third most popular in 2021 after those made by Kamaz and GAZ. The Swedish firm sold around 6,000 trucks that year, up 61% from 2020, according to Autostat Info data. The company's market share was 8.5%. The fleet of Volvo trucks in Russia exceeded 105,000 in 2021. The company said in its latest quarterly reporting that Russia accounted for around 3% of its global sales in 2021.