Russian Court Orders Volkswagen Pay $193M in Damages to Carmaker

A Russian court has ordered Volkswagen to pay 16.9 billion roubles ($193 million) in damages to Russian carmaker GAZ Group, which had sued the German automaker over lost profits after Volkswagen exited the Russian market.

In May 2023, Volkswagen finalized the sale of its local subsidiaries and a plant south of Moscow to Art-Finance, supported by auto dealer group Avilon, which later renamed the factory AGR Automotive. The price was not disclosed, but a person familiar with the matter told Reuters the deal was valued at 125 million euros ($135 million).

GAZ had been contracted to produce Volkswagen vehicles at its Nizhny Novgorod factory, and in a separate case had also sought damages from Volkswagen over the termination of engine deliveries.

Volkswagen was one of many Western companies to leave Russia following Moscow’s invasion of Ukraine. Many foreign carmakers sold assets at cut prices in their haste to exit, leaving a gap that has been plugged mainly by Chinese competitors.

GAZ Group’s initial claim to recover 28.4 billion roubles from Volkswagen in damages was partially satisfied by the Nizhny Novgorod Arbitration Court, Interfax news agency reported.

Volkswagen and GAZ Group did not immediately respond to requests for comment.

It was not clear if Volkswagen intended to pay or whether it would appeal.

The lawsuit was filed in April 2023.

GAZ has filed other claims, seeking around another $350 million in damages, saying VW’s moves to exit the Russian market had put its interests at risk.

It initially persuaded a court to freeze Volkswagen’s assets in Russia pending court proceedings, but that was subsequently reversed.

($1 = 0.9241 euros)

($1 = 87.4000 roubles)

(Reporting by Marrow and Stolyarov; Editing by David Holmes)