Volkswagen assets in Russia frozen by court over dispute with GAZ

A Russian court on Monday froze all Volkswagen assets in Russia, in the latest obstacle to the German carmaker's year-long efforts to wind down its Russian operations.

Volkswagen, along with other foreign carmakers, suspended operations in Russia last year after western countries imposed unprecedented sanctions on Moscow over the conflict in Ukraine.

Volkswagen has been trying to sell its Russian assets, including its flagship plant in the city of Kaluga, which has production capacity of 225,000 vehicles a year and has been furloughed since March 2022.

Russian auto manufacturer GAZ, which was contracted to produce Volkswagen vehicles at its factory in Nizhny Novgorod, sought to halt to any sale as part of a lawsuit against the German carmaker for what GAZ says is a breach of contract after Volkswagen terminated the production agreement in August.

In court filings, GAZ said Volkswagen's attempts to exit the Russian market put its own interests at risk and it is seeking 15.6 billion roubles ($201.3 million) in damages over the terminated contract.

A Russian court on Monday agreed to freeze all of Volkswagen's assets in Russia while the dispute with GAZ plays out, court documents showed, further hitting VW's attempts to wind down its Russian operations.