Renault-Nissan has finalized an agreement to expand in Russia, with an investment of around $742 million in a joint venture that will control local carmaker AvtoVAZ. According to Renault-Nissan chief executive Carlos Ghosn, the agreement, signed Wednesday, will accelerate the carmaker’s "Russian market offensive."
Renault-Nissan’s joint venture with Moscow state company Russian Technologies represents a step up for the carmaker, which has been attempting to penetrate the Russian market for four years. Under the agreement, which will be completed by mid-2014, Renault-Nissan will invest RUR23 billion ($742 million) to take control of AvtoVAZ through a 67.13-percent stake in the joint venture by mid-2014.
Russian Technologies will own 32.87 percent of the joint venture. The joint venture will then acquire 74.5 percent of AvtoVAZ. As part of the deal, Renault-Nissan will occupy eight seats on an expanded board of 15 members, up from 12. Renault-Nissan investment comes as vehicle sales in Russia have slowed down. Car sales in November were flat as Russians deferred spending due to a slowdown in the country's economy.