PARIS -- Any sanctions imposed on Russia for its actions in Ukraine by the U.S. and allies could affect Europe's biggest automakers, including Renault Group, Volkswagen Group and Stellantis. All three have significant operations in Russia.
Renault Group has the most exposure with its controlling stake in AvtoVAZ, maker of Lada, long the market leader in Russia. In addition to the huge AvtoVAZ factory in Togliatti, Renault has an assembly plant near Moscow -- and Russia is the group's second-largest market after France.
U.S. and European governments were threatening new sanctions on Tuesday after Russian President Vladimir Putin recognized two self-proclaimed separatist republics in eastern Ukraine and ordered troops sent to them in the latest escalation of Moscow's standoff with the West.
Those sanctions would probably apply to the separatist areas, but U.S. President Joe Biden has promised "swift and severe economic measures" should "Russia further invade Ukraine."
It is not clear what form these would take, but sanctions reimposed on Iran after the nuclear arms agreement collapsed in 2018 also applied to foreign companies doing business there.
As a result, PSA Group, Renault and others abandoned production operations in Iran. PSA lost hundreds of thousands of annual sales because of decision.
Renault CEO Luca de Meo said on Friday that the automaker was monitoring the situation "carefully."
"We have a great interest in the Russian market," he told investors on Renault's 2021 results call, noting that Lada sales were "90 percent" in Russia, and parts sourcing was highly localized, which could avoid supply chain issues for components coming from outside Russia.
Renault CFO Clotilde Delbos said AvtoVAZ's debt and financing was local, "with no support from Renault Group," and that it was "fully self-sufficient."
"In our view, it's quite secure," she said.
Renault's shares were down 4.2 percent on Tuesday in European trading.
On Tuesday, Nicolas Maure, the CEO of AvtoVAZ, said the automaker is looking to secure alternative supplies of electronic chips in case U.S. sanctions curbed deliveries to Moscow.