12 December 2012, 23:22

Lada makers spreading wings

Lada makers spreading wings

A deal struck with Renault-Nissan is likely to propel Russia’s AvtoVAZ, known for its Lada models, to the world’s third biggest car maker.

The deal is between Renault-Nissan and the Rostekhnologia agency, which operates AvtoVAZ. It comes after two years in which cooperation with the French-Japanese auto giant, which included the coaching of Russian engineers and workers in Togliatti, helped the Russian firm dramatically broaden the range and upgrade the quality of its products.

Mr Andrei Shenk is a leading analyst of the Investkafe investment consultants:

"A joint company is to be established, in which Renault-Nissan will own one half of the stock plus one share. The new owners will bring cutting-edge technology and knowhow to AvtoVAZ, together with $750mln worth of investment. In exchange, they will gain access to the Russian company’s production facilities, including assembly lines. They will also enjoy the benefits of AvtoVAZ's vast dealership and service network. This network consists of more than 400 outlets operating in all Russian regions".

Mr Mikhail Pak is an analyst of the ATON investment group:

"The post of the joint company’s CEO will likely go to Mr Carlos Ghosn, who currently heads Renault-Nissan. AvtoVAZ hopes he will turn it around in the manner he turned around Nissan in the early 2000s. From near bankruptcy, Nissan is back to profit and expansion again. With Ghosn at its helm, and with Russia’s car market booming on, AvtoVAZ should soon emerge as one of the world’s biggest car-makers".

To be more precise, the biggest in Europe by 2014 and the third biggest in the world by 2020. Five new high-quality but moderately-priced models are on its immediate plans.

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