Renault-Nissan is to acquire a majority stake in Avtovaz, the Russian company that makes Ladas
3 May 2012

Renault-Nissan is to acquire a majority stake in Avtovaz, the Russian state car maker that produces Lada cars. As part of the development, Renault-Nissan will update all core Lada models and launch new cars from all three brands in Russia.

Five models will be built at Avtovaz’s revamped factory in Togliatti, south west Russia, which has a capacity of almost one million cars per year.

The deal will allow Renault-Nissan to take advantage of Russian’s economic strength. It has the fastest-growing economy in Europe and should remain in the forefront for several decades, with car and light van sales expected to grow from 2.65m last year to 2.9m in 2012.

The Renault-Nissan Alliance sold 878,990 cars in Russia last year – including 578,387 Ladas. With a market share of nearly 33 per cent, Russia is the Alliance’s third largest market after China and the United States. However, Avtovaz has been phasing out the so-called 'classic' Ladas that it still builds, such as the venerable 2104 Station Wagon, and its modern car range needs revamping.

Under the terms of the agreement, Renault-Nissan and state-owned Russian Technologies will pool their respective shares in Avtovaz into a joint venture. Then, in 2014, the joint venture will acquire the stake in Avtovaz currently owned by Russian investment company Troika Dialog.

Renault, which already has a 25 per cent stake in Avtovaz, will invest about £185m in the deal, while Nissan, which does not currently have a stake in the Russian firm, will put in about £280m. This will give the French-Japanese car group a 67.13 per cent stake, with Russian Technologies’ stake taking the joint venture to a controlling interest of 74.5 per cent.

Renault-Nissan Alliance boss Carlos Ghosn said the agreement is, “the latest step in an expanding collaboration that helps modernise the leader of Russia’s auto industry. Just as Renault and Nissan will continue their technology transfer to Avtovaz plants, our Avtovaz colleagues will contribute more and more to the Alliance’s multicultural management bench.”

An outline memorandum of understanding was signed today, and the deal is due to be finalised by the end of this year.

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Comments
11

3 May 2012

Does this mean a second string of budget cars for the Renault brand, to join Dacia or is there going to be some re-badging going on?

The way I read it, they look like they are going to retain some independence which means they should produce some unique vehicles. Could be interesting.

 

 

It's all about the twisties........

3 May 2012

[quote TegTypeR]

Does this mean a second string of budget cars for the Renault brand, to join Dacia or is there going to be some re-badging going on?

The way I read it, they look like they are going to retain some independence which means they should produce some unique vehicles. Could be interesting.

[/quote]

Could very well be linked to the return of the Datsun brand globally, as the low pricing point will need to be supported by low production costs.

4 May 2012

"It has the fastest-growing economy in Europe and should remain in the forefront for several decades"

Says who? 'Several decades' is such an absurd forecast one has to know where it comes from, and honestly who among us would take a punt on Russia leading Europe out of recession?

4 May 2012

[quote TegTypeR]Does this mean a second string of budget cars [/quote] Yes and they will have Russian steel !!!!! Think about it :-(

4 May 2012

[quote Londonist]Says who[/quote] ME sunshine. Find me ANY country other than China that has the growth of Russia over the last 5 years and the forcast is for much higher growth here. Do you think that Toyota GM Ford Hyundai and Nissan (and now Renault) are stupid. Russia is booming right now and will continue to do so as it catches up to the rest of the world. The rest of Europe is trying to stay alive mate. Greece will be out shortly and will be followed by others - which is good for them and good for those that stay. Only then can they grow both within and without.

4 May 2012

From my experience living in Vladimir, I feel the economy is growing too fast. Most things are now similar prices to the rest of Europe and in some cases (used car market for one!) things cost more. But, the salaries are not rising to meet this. Yes, in Moscow and StP they are, but outside it's a different story/

Too many people are taking huge amounts of credit to pay for just about everything. I wouldn't bet on this economy not crashing in the not too distant future....

4 May 2012

[quote Londonist]Says who? 'Several decades' is such an absurd forecast one has to know where it comes from, and honestly who among us would take a punt on Russia leading Europe out of recession?[/quote]

Russia: Currently the worlds 2nd largest oil exporter.

Huge gas reserves probably the worlds biggest.

Name any mineral or metal and Russia has huge amounts of it.

Land, they don't make it anymore and who has the most, yet a modest population of 230 million?

Yes Russia needs political stability to grow economically but it has the world's greatest potential to do so.

4 May 2012

Robin Geffin, an eccentric Investment Fund Manager who founded Neptune Investments in 2002 has been investing in Russia for many years.

His Russia and Greater Russia Fund has grown to date since inception in 2004 by 207%.

Just a mere average of 25% per year. It's volatile of course, almost losing all growth in 2009, but has recovered since.

However, a word of caution (but optimisim for the investor perhaps) it lost 20% in the last 12 months.

This is classic emerging market territory and clearly demonstrates that the market still perceives Russia as a a good place to invest, but only for the high risk taker.

This vast volatility will smooth out when the economy becomes more stable and more consistant itself, a long way off yet.

 NeVeR L8te Smile

5 May 2012

There is a 61 plate lhd Lada Niva on autotrader currently for £3000. Seems a total bargain to me. http://www.autotrader.co.uk/classified/advert/201217466493947/sort/defau...

5 May 2012

[quote Beastie_Boy]There is a 61 plate lhd Lada Niva on autotrader currently for £3000. Seems a total bargain to me[/quote]

It's a 58-plate - there's a misprint in the ad. But you're right - it's a hell of a lot of three-year-old workhorse for £3k, especially as a new one costs almost £11k.

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