Renault SA and partner OAO AvtoVAZ agreed to build cars together starting in 2012, part of the French automaker's effort to satisfy Russian government demands for aid to forestall dilution of the company's stake.
The venture would make 300,000 vehicles a year by 2015, AvtoVAZ President Igor Komarov told reporters today at the company's main plant in Togliatti, Russia. AvtoVAZ will provide 25 percent of the funding, with the remainder coming from Renault's alliance with Nissan Motor Co., Komarov said.
Russian Prime Minister Vladimir Putin said on Oct. 2 that Boulogne-Billancourt-based Renault should help finance AvtoVAZ's overhaul as a shareholder or face having its holding reduced to less than 25 percent. Renault is ready to offer technology to help AvtoVAZ modernize production, First Deputy Prime Minister Igor Shuvalov said yesterday. The platform, including chassis and major parts, will be based on Renault's low-cost Logan car.
The joint car project "signals that our strategic partners have confirmed their intention to keep their stake in AvtoVAZ," Komarov said today.
Renault acquired its holding in AvtoVAZ, Russia's biggest carmaker, at the end of 2007 for $1 billion. The government also owns 25 percent, and another 25 percent is controlled by Troika Dialog, the country's oldest investment bank. Frederique Le Greves, a spokeswoman at Renault, said today that the company had no immediate comment.
Support vs Losses
The state has already spent 25 billion rubles ($844 million) to support AvtoVAZ, which Komarov said may lose 35 billion rubles this year. Vnesheconombank, the Russian state-run development bank known as VEB, may buy as much as 40 billion rubles of the carmaker's bonds, Chief Executive Officer Vladimir Dmitriev said yesterday.
Renault, Nissan and AvtoVAZ will each introduce vehicles based on the joint platform in 2012, and Renault may produce a model exclusively in Russia for the local market, Komarov said today. Renault, France's second-biggest carmaker, owns 44 percent of Yokohama-based Nissan, Japan's third-biggest auto manufacturer, and the two companies cooperate on some parts, production and marketing.
