Who is buying VW’s assets in Russia?

In 2007, the Volkswagen Factory was launched in Kaluga in SKD format and two years later, it started full-cycle production. Its capacity is 225 thousand cars per year. But after the start of the war in Ukraine, the work of the factory was suspended, and then Volkswagen Group considered selling the factory in Kaluga.

As reported by “Izvestiya”, the main contender for the purchase of the Kaluga factory was Avilon car dealer holding which was Volkswagen’s own dealership, and after the withdrawal from the Russian market, this fact was a distinct competitive advantage.

Avilon is a large Russian dealer of luxury cars with a revenue of 86,9 billion rubles. And it’s the dealer that can sell and serve cars but not produce them. The purchase of the factory is an opportunity for the dealer to buy the capacities at a low price and sell them at a higher price. The sales discount when selling the business leaving Russia should be not less than 50% of the price reported in the company's latest financial statements.

The Avilon holding provides cars for almost all Russian security agencies including the Prosecutor General's Office, the Federal Protective Service, the National Guard, the Investigative Committee, and the Ministry of Internal Affairs. The founders of Avilon - Alexander Varshavsky and Kamo Avagumyan get government contracts for hundreds of millions of rubles. According to the service for checking Russian and foreign counterparties Kontur.Focus, Avilon sold cars to Russian security agencies for tens of billions rubles.

Avagumyan has been an official representative of the Armenian Prosecutor General's Office in Russia since 2008, and that allows him to communicate personally with representatives of the prosecutor's offices. Also, The Russian media wrote a lot that Kamo Avagumyan had a good relationship with ex-Prosecutor General of Russia Yuri Chaika and his family and Sahak Karapetyan who was a Deputy Prosecutor General.

Close ties between Avilon and the relatives of the Russian Prosecutor General's Office leaders were confirmed during the trial with Probusinessbank, whose license was revoked in 2015.

The journalists of Fontanka.ru revealed financial interactions between Avilon and the relatives of the Russian Prosecutor General's Office leaders. Avagumyan gave cash to bankers in foreign currency, and in return, he received promissory notes repaying the amount plus interest. When the bank's license was revoked, Avagumyan and his company had unpaid promissory notes for about $100 million.

Probusinessbank management accused Avilon officials of threats and initiating criminal prosecution. Avilon and Avagumyan filed a counterclaim demanding to return the money. During the trial, documents and audio recordings of conversations were presented, indicating close financial relations between the co-owners of Avilon and the relatives of high-ranking leaders of the Russian Prosecutor General's Office.

In addition, Avilon owner’s family has a joint business with Chaika’s family, they own Pomegranate Wellness Spa luxury hotel on Chalkidiki peninsula in Greece. Avagumyan owns half of the Cypriot company Amiensa Holdings, which owns 42,5% of the Pomegranate Wellness Spa hotel.

Avagumyan states that his company is in no way affiliated with the Prosecutor General's Office employees or their relatives. But government contracts for tens of billions of rubles, a joint business and a lawsuit with Probusinessbank raise some doubts about this.
In March 2022, Volkswagen announced the suspension of car production in Russia precisely due to the Russian military operation in Ukraine. But now the sale of assets to Avilon which supports the Russian-Ukrainian conflict and works closely with the security agencies of the Russian Federation, is turning into support for the aggressor country.

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