A Russian court froze all of Volkswagen’s assets in Russia on Monday over a dispute with Russia’s GAZ group, the latest hurdle in the German automaker’s year-long effort to wind down its Russian operations, Reuters reported.

Volkswagen, along with other foreign automakers, suspended operations in Russia last year after Western countries imposed unprecedented sanctions against Moscow over the conflict in Ukraine.

The company is trying to sell its Russian assets, including its flagship plant in the city of Kaluga, which has a production capacity of 225,000 cars a year.

Russian automaker GAZ, which was contracted to produce Volkswagen cars at a plant in Nizhny Novgorod, sought to stop any sales as part of a lawsuit after Volkswagen terminated the production agreement in August.

In the lawsuits, GAZ said Volkswagen’s attempts to exit the Russian market put its own interests at risk, and is seeking 15.6 billion rubles ($201.3 million) in damages for the broken contract.

A Russian court ordered on Monday to freeze all of Volkswagen’s assets in Russia amid its dispute with GAZ, court documents showed, further affecting VW’s efforts to wind down its Russian operations.

Volkswagen’s Russian subsidiary said it was surprised by the lawsuit and that their partnership ended “on mutually agreed terms.” “We are aware of GAZ’s complaint and are familiar with the case documents,” VW said in a statement to Reuters.

He also said that Volkswagen is going to apply to Russian government authorities to sell its stake in Volkswagen Group Rus, including the Kaluga plant with more than 4,000 employees, to a “credible Russian investor.”

“We hope that the lawsuit will not delay the transaction,” the statement added. GAZ declined to comment. The Ministry of Industry of Russia did not respond to a request to comment on the situation.

Earlier this week, Czech automaker Skoda Auto, part of the Volkswagen Group, said it was in the final stages of a deal to sell its Russian assets. (News.ro)

(article photo: DreamsTime.com)