Renault-Nissan and Avtovaz create common purchasing organisation In Russia

Togliatti (Russia), September 19, 2013: The Renault-Nissan Alliance and Avtovaz have announced the establishment of a common purchasing organisation in Russia. This structure will manage a defined scope of purchasing for Renault, Nissan and Avtovaz joint activities related to industrial equipment, powertrains and vehicles based on common platforms.

‘Common Purchasing Organisation’ LLC (CPO) is equally owned by Avtovaz and Renault-Nissan Purchasing Organisation (RNPO) on which it will be modeled. Established in 2001, RNPO is Renault-Nissan’s largest common organisation and biggest contributor to new synergies derived from cost reductions and cost avoidance. RNPO covers all purchasing activities of both Renault and Nissan worldwide.

Like RNPO, CPO is expected to generate significant savings for the three partners in Russia thanks to increased volumes and better pricing with suppliers. CPO will use the RNPO methods and standards that have contributed to its success. RNPO generated 851 million euros in new synergies for Renault-Nissan in 2012, or about a third of total synergies.

CPO will communicate a common position to suppliers on quality, costs and delivery deadlines, as well as develop relations with suppliers in order to increase parts localisation in Russia. CPO will attract global companies to the Avtovaz and Renault-Nissan Alliance supplier base. This is expected to help upgrade the technology and quality of Russian suppliers.

The establishment of the CPO marks a new step in the development of the strategic partnership between Avtovaz and Renault-Nissan Alliance which began in 2008 when Renault took a 25 percent stake in Russia’s largest automaker. CPO will stimulate the ongoing integration of Avtovaz and the Alliance, strengthening the competitiveness of the Lada brand and optimising the production of new vehicles under the three partners’ brands.

Daniel Perry has been appointed CEO of the new organisation and will be based at the company’s headquarters in Togliatti, Samara Oblast. He will report to a governance committee composed of Christian Vandenhende, RNPO managing director, Yasuhiro Yamauchi, RNPO deputy managing director and Damir Kashapov, Avtovaz vice-president, purchasing.