Renault and Russian Prime Minister Vladimir Putin have agreed a plan to save ailing carmaker Avtovaz from collapse.
Renault bought a 25 per cent stake in the maker of Ladas in February 2008. In a deal signed in Paris, the Russian government has agreed to invest over £1bn in the giant, in exchange for the transfer new technology valued at £220m. The injection of cash is designed to help Avtovaz re-structure its debts and to try and hang on to its 25 percent share of the regional new car market, despite its ageing model range. The Russian new car market plunged 57 per cent last year and Avtovaz was hit particularly hard.
Renault and Nissan both expect to build ‘value’ cars at Avtovaz’s Togliatti plant from 2012, as well as all-new models under the Lada brand. With a production target of 900,000 units annually, around 650,000 units are expected to be Lada-badged.