Renault-Nissan Alliance and Avtovaz to set up merged purchasing firm in Russia

Renault SA, Nissan Motor Co and AVTOVAZ will merge their purchasing activities in Russia, effective January 2015. The new AVTOVAZ-Renault-Nissan Purchasing Organization, or ARNPO, will manage the purchasing activities of all three partners in Russia under the international standards of the Renault-Nissan Purchasing Organization (RNPO). Established in 2001, RNPO handles all purchasing activities of Renault and Nissan worldwide and is the biggest contributor to Renault-Nissan synergies.

ARNPO will take over the activities of Common Purchasing Organization (CPO), an equally-owned company established by RNPO and AVTOVAZ in September 2013 to manage purchases for the three companies’ joint projects in Russia. Recently became an affiliate of RNPO following RNPO’s purchase of a 49 percent stake in CPO from AVTOVAZ. RNPO’s stake in CPO now stands at 99 percent.

RNPO’s share increase in CPO has been approved by Russia’s Federal Anti-monopoly Service. In January, CPO will change its name to AVTOVAZ-Renault-Nissan Purchasing Organization (ARNPO) and integrate the individual purchasing departments of the three partners in Russia as well.

The establishment of ARNPO marks the latest milestone in the deepening partnership among the three companies, which began in 2008 when Renault took a 25 percent stake in Russia’s largest automaker. Today, the Renault-Nissan Alliance owns a 67.13 percent stake in the joint-venture which controls AVTOVAZ. Together they produce vehicles at the Togliatti plant, one of the world’s largest auto plants, under four brands: LADA, Renault, Nissan and Datsun. Thanks to the combined purchasing volume of Renault, Nissan and AVTOVAZ, ARNPO will become the largest buyer in Russia’s auto industry and will help integrate AVTOVAZ further into the global industry. 

 ARNPO’s main responsibilities will include:

• Purchasing of parts, equipment and tooling, as well as indirect purchasing, including services, for  AVTOVAZ, Renault and Nissan;
• Supplier quality and development;
• Establishing unified RNPO procedures to select and improve the local supplier base in Russia to achieve international quality, cost, delivery, development and manufacturing standards, and to assist with Russia’s continued integration into the global automobile market.

ARNPO will be structured as a limited liability company headquartered in Togliatti, with branches in Moscow, Izhevsk and St. Petersburg. Venkatram Mamillapalle, purchasing vice-president of AVTOVAZ, will be appointed general director of ARNPO in January 2015. The new structure will integrate employees from Renault, Nissan and AVTOVAZ in Russia.