Renault-Nissan increases Lada stake

December 17, 2012: The Renault-Nissan Alliance has acquired a majority shareholding in Avtovaz, Russi’a largest carmaker. The deal to takeover Avtovaz, better known as Lada, has been done through a new joint venture between Renault-Nissan and the Russian Technologies State Corporation. Renault-Nissan is to invest US$ 742 million (Rs 4,039 crore) into the deal, acquiring 67.13 percent of the joint venture, which will hold 74.5 per cent of Avtovaz, by mid-2014. The joint venture will then hold 74.5 percent of Avtovaz.

This deal promotes Renault, Nissan and Lada’s improved synergy and product development in the fast-growing Russian market. The joint venture is hoping to have a manufacturing capacity of at least 1.7 million cars in Russia by 2016. Production will take place at a new facility in Togliatti – which is already producing the Lada Largus and Nissan Almera – as well as further sites in Moscow, St. Petersburg and Izhevsk.

The Togliatti assembly complex has a manufacturing capacity of 350,000 vehicles per year. It will become home to one of the largest platform-sharing programmes in the Renault-Nissan Alliance. Production will soon span five models across three brands – Lada, Renault and Nissan. Investments in this project will total about €400 million (Rs 2,847 crore).

Russia is the third largest market for the Renault-Nissan Alliance, which sold 878,990 cars there in 2011, 578,387 of which were Ladas – a market share of almost 33 percent. Total automotive industry volume in Russia last year was 2.65 million vehicles, including light commercial vehicles. In 2012, the volume is expected to increase to 2.9 million units.

Renault-Nissan Alliance

The Renault-Nissan Alliance is a strategic partnership between the Paris-based Renault and Yokohama, Japan-based Nissan. The two companies have been strategic partners since 1999 and sold 8.03 million cars in nearly 200 countries in 2011. The Alliance operates strategic collaborations with numerous automakers, including Germany’s Daimler, China’s Dong Feng and India’s Ashok Leyland.

Photograph: L-R: Igor Komarov, president of Avtovaz; Sergey Chemezov, general director of Russian Technologies and chairman of the Board of Avtovaz; Carlos Ghosn, chairman & CEO of the Alliance; and Ruben Vardanian, chairman of the Board of directors and CEO of the Troika Dialog Group at the signing of the JV agreement.