Russian court seizes Volkswagen assets

The court of arbitration in the Nizhny Novgorod Oblast has seized non-monetary assets belonging to Volkswagen after a request filed by GAZ.

The Russian court agreed to seize the assets of the German auto giant due to a lawsuit filed by GAZ, a Russian car manufacturing company. GAZ insists that VW’s decision to cancel a contract for car assembly in Nizhny Novgorod caused damages of $202.4 million for GAZ.

As a result of the GAZ complaint, the court banned any actions linked to the liquidation or reorganization of Volkswagen Group Russia, VW’s Russian subsidiary. Also, the company can’t change its fixed capital and its stakeholder must restrain from any deals with their shares.

Moreover, the ban has also covered VW shares in its other subsidiaries in Russia: Volkswagen Components and Service, Scania Leasing, Scania Insurance and Scania Finance.

Since the German automaker wants to leave Russia, GAZ is concerned that it will not be able to collect damages if VW sold its assets in Russia, including its giant manufacturing site in Kaluga.

According to GAZ, the two companies had an agreement on contract car assembly in Nizhny Novgorod. This contract was supposed to last until 2025, but VW has stopped all its activity associated with car manufacturing in Russia. In August 2022, the two sides agreed to cancel the contract.

Before Russia’s full-scale invasion of Ukraine, the GAZ manufacturing site in Nizhny Novgorod was where VW assembled Skoda Octavia, Skoda Karoq, Skoda Kodiaq and Volkswagen Taos. The two companies had cooperated since 2012.

In Kaluga, Volkswagen produced thousands of engines and about 225,000 cars (Polo, Tiguan and Rapid) a year. This production activity stopped in the spring of last year. Some Russian media reported that Avilon Group is the main contender for VW assets in Russia.