Renault mulls producing cars for Russia after acquiring majority of AvtoVAZ

Article by Anita Panait, on March 9, 2012

French carmaker Renault is considering producing vehicle models that will target Russian consumers as soon as the company and Japanese affiliate Nissan formally ink an agreement to acquire a majority stake in Russian carmaker AvtoVAZ. Philippe Klein, the head of Renault's product planning, said during an interview at the ongoing Geneva Auto Show that Renault may want to use AvtoVAZ's facilities to develop vehicles intended for the Russian market.

"We do have the situation in India, where we launched the Renault Pulse, and we leveraged the assets of Nissan in this region to expand our line-up," said Klein, adding that the company’s potential move is in line with its global strategy of “undertaking when it makes sense."

Nissan is also mulling the same production option as Renault. Colin Dodge, Nissan Chief Performance Officer, said at the show that Nissan wants to add three models built in Russia.

The Renault-Nissan alliance is currently holding talks with AvtoVAZ's top two Russian shareholders to acquire a controlling stake in the Russian automaker and expects to seal the deal in coming weeks, according to Carlos Ghosn, CEO of Nissan-Renault. Ghosn said that the talks will probably accelerate now that Russia's presidential elections are done. Renault currently holds a 25% stake in AvtoVAZ.

Once the deal is sealed, the three partners, Nissan, Renault and AvtoVAZ, will produce cars from a joint platform used for Renault's Dacia Sandero and Logan models, Klein disclosed.

The alliance is hoping to take advantage of the growing car and light-truck market in Russia, where around 2.65 million vehicles were sold in 2011 for a 39% growth.

AvtoVAZ posted a 33% hike in sales in February. Christian Klingler, sales chief at Volkswagen, remarked that the expanding car maker in United States, Russia and China will offset the declining demand for vehicles in Europe to keep the global auto-industry growth at  a "low single-digit" rate.

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