Renault-NIssan alliance wants to increase sales in Russia

Article by Christian Andrei, on July 19, 2011

The alliance of Renault and Nissan is targeting an increase in new-vehicle sales in Russia to 1.6 million cars within five years while it is seeking to take control of AvtoVAZ, which is the largest automaker in the country.

Increasing the market share of the alliance in Russia to 40 percent is part of the new strategy of Renault-Nissan Chief Executive Officer Carlos Ghosn, dubbed as Drive the Change 2012-2016.

Renault's senior vice president for the Eurasia Region, Bruno Ancelin, stated that as the Russian market is expected to grow to 4 million units by 2016, this means that Ghosn is aiming for around 1.6 million units in sales, including Renault, Nissan and AvtoVAZ's Lada cars.

In the first six months of this year, AvtoVAZ had a 23.6 percent Russian market share while Nissan had 4.8 percent and Renault had 6 percent, for a total of a 34.4 percent share.

The CEO’s target is to increase AvtoVAZ's market share to 25 percent, Nissan's to 7 percent and Renault's to 8 percent. Renault currently owns 25 percent of AvtoVAZ. Ghosn intends to boost the alliance's share in AvtoVAZ to 50 percent plus one share to be able to fully combine its results.

Discussions are ongoing and an agreement is expected to be reached by the end of the year, Renault disclosed. There are speculations that Renault will purchase another 15 percent of AvtoVAZ while Nissan will seek a 10 percent share.

The alliance will expand production in Russia to help meet the sales target. As of the moment, the Renault-Nissan alliance, AvtoVAZ included, has a capacity of around 1.1 million units a year. AvtoVAZ has an installed annual capacity of 900,000 units on two shifts.

Topics: renault, nissan, russia

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