Renault-Nissan and Russian partner AvtoVAZ have opened a new production line at the Russian company's facility in Togliatti. According to Renault, this new line has a capacity of 350,000 units per year, and it will manufacture vehicles for the three brands. This is the sixth production line at the Togliatti facility, which is the largest vehicle plant in the world.
This plant is located 1,000 km southeast of Moscow. It has a capacity of 1.5 million units each year. Renault sees big opportunities in Russia due to the low car ownership rate at 230 automobiles per 1,000 individuals, which is less than 50% of the number in France. Also, Russians do their best to acquire a new vehicle as a symbol of social success.
Renault anticipates completion of its purchase of a majority share in AvtoVAZ at the end of April after buying a 25% share in the company in 2008 for $1 billion. CEO Carlos Ghosn at Renault-Nissan stated that the vehicle manufacturers will benefit as Russia increasingly becomes the economic engine of growth in Europe.
He commented that the collaboration is "deepening every day" and is boosting economies of scale throughout the alliance. Consulting firm Ernst & Young estimated that Russia will outperform Germany as the largest vehicle market in the European region in 2015 with yearly sales of 3.4 million vehicles.
The Moscow-based Association of European Business (AEB) estimates that vehicle sales this year will be at 2.8 million units. The first automobile rolling off the new production line was the Lada Largus, a rebadged variant of the seven-seat Dacia Logan MCV station wagon.
The production of Lada will be followed by a Nissan automobile later this year. Two Renault vehicle models will then follow in 2013. Five different automobile models will be manufactured on the line for the three brands. During the first quarter of 2012, Lada was the largest brand in Russia in terms of volume even with its unit sales dropping 15% to 109,388, according to the data from the AEB.