The net profit of AvtoVAZ increased more than 100% in 2011 to 6.7 billion rubles or $215.75 million, Russia's biggest automaker disclosed. The company, which manufactures Russia's bestselling Lada units, also revealed that revenue rose 27% to 175.1 billion rubles last year on increased demand for the brand.
The Renault-Nissan alliance announced earlier this month that it would shell out around $750 million to take a majority holding in AvtoVAZ, together with Russian Technologies Corp. The companies are targeting mid-2014 to complete the transaction. The investment will include around $300 million from Renault and the rest will be from Nissan.
Renault already has 25% of AvtoVAZ through a 2008 purchase for $1 billion. Nissan and Renault's Carlos Ghosn is seeking to the Russian company to help boost fuel growth in Russia. The country may outperforming Germany as the largest market in the European region, as the Russian market is expected to go as high as 4 million annual sales in 2015, thanks to increasing incomes and a heave in consumer spending that take consumers toward showrooms.
In 2011, 2.65 million cars and light commercial automobiles were sold in Russia, with the market anticipated to hit the 2.9 million mark this year. AvtoVAZ intends to have 25% market share in Russia in five years, or 40% when combined with Nissan and Renault. With a present combined share of almost 33%, Russia is the alliance's third-largest market next to China and the U.S. Lada sales increased to 578,400 in 2011, bringing a market share of 21.8%.