By on November 3, 2010

In the car world, the BRIC countries have already got their institutional market leaders. That’s how quick these markets are moving. General Motors and Volkswagen have an iron grip on the Chinese market, Suzuki and Hyundai have India in their palms. Fiat is king in Brazil. But Russia is still anybody’s game. Well, Renault and Nissan want to change that.

Bloomberg reports that Renault-Nissan is closing in on taking a majority stake holding in Russia’s AvtoVAZ. The tipping point for going after AvtoVAZ was when Prime Minister Vladimir Putin gave his blessing to the deal.

Is this a gamble which will pay off? The one thing I see working against it is the return on investment. Of the BRIC countries, China’s car market was 13.5 million annually last year. This year, it might be 17m, India is currently at 1.5 million, but with nearly 1.2 billion customers, that figure has the potential to reach China levels. Brazil’s market is currently at 3.2 million and still growing. Russia’s car market? Russia sold less than 1.5m cars last year, but Bloomberg estimates that Russia could reach sales of 4 million. By 2015. Not to mention the rampant corruption which is making running operations in Russia troublesome. Of the BRIC countries, Brazil is 69th on the Corruption Index, China is 78th and India is 87th. Where’s Russia? They’re 154th. 20 places below Zimbabwe. Bonne chance, Carlos. You’re going to need it.

Get the latest TTAC e-Newsletter!

4 Comments on “Renault-Nissan Close In On Russia. Is It Worth It?...”


  • avatar
    Mr Carpenter

    Once they’ve GHOSN into Russia, I wish them a LADA luck….

    (sorry, couldn’t resist)

  • avatar
    L'avventura

    The corruption issue is a major one, especially when you are dealing with an industry that Putin himself has shown to meddle in.   As my Russian friend keeps saying, “no self-respecting Russian does business with another Russian”.
     
    But I have to admire Ghosn, he has shown himself to someone that is willing to take high-risk investments when the long-term prospects look favorable; such as their gamble on EV.  Russia does have the potential to become a major car market, and there is no better way then to partner with a AvtoVaz that has close ties with the government.
     
    But Carlos needs to be wary about government meddling, if you think Obama was bad meddling in GM, you wouldn’t want to see what Putin can do…

    • 0 avatar
      Jacob

      In the last 2 years, the governments of pretty much every country had been meddling in in their car business. Simply stated, if Russian government didn’t do anything, VaZ (the maker of Ladas and other Russian cars) wouldn’t exist today any longer.

  • avatar
    Jacob

    Russian car market is pretty big, but the Bloomberg projection is rubbish. This is how the bubbles are being started. It will never reach 4m. Right now 1.5m cars are sold. To sell significantly more, you need a high growth rate in GDP per capita or high population growth rate, neither of which is happening in Russia. At best, Russian market will be at about 2m five years from now.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

  • Re: Daimler Boss Calls For Safety Standard Harmonization

    Lou_BC - @Vulpine – I don’t consider myself a fan of any size or class of truck. I buy what I think most closely fits my needs at the time...
  • Re: Ford’s Final Ute

    TonyJZX - i can imagine how silly this vehicle looks for non Australians because its ridiculously silly to me who wants a rwd live axled 4,000lb ute with a Ford Fusion note glued...
  • Re: Life With Accord: 12,000 Miles

    Pete Zaitcev - Not anymore. To the best of my knowledge, you cannot get a bare tub Wrangler in the JK generation. It turns out a good thing, because the 42RLE auto is a real...
  • Re: Life With Accord: 12,000 Miles

    supremebrougham - I bought a leftover 2013 Civic back in the spring. Fine little car, but the carpet is the poorest excuse for carpet I have ever seen! As for the floormats,...
  • Re: Life With Accord: 12,000 Miles

    Kyree S. Williams - Late-model GS 350? Nice. As it stands, that’s the only new Lexus I’d want to own. It’s a thrill to drive, wears Lexus’ newest...
  • Re: Life With Accord: 12,000 Miles

    Kyree S. Williams - I might do 100 MPH in short bursts, but I don’t want to see what a “30-over” speeding ticket looks like, so I wouldn’t do it for...
  • Re: Life With Accord: 12,000 Miles

    Kyree S. Williams - Yes, we’ve also had a 1990 Accord (EX, white exterior/eggplant-colored interior with leatherette upholstery), and I can say the same for *its*...
  • Re: Life With Accord: 12,000 Miles

    drw1926 - Thanks for the heads-up, I’ll keep that in mind if I’m ever considering the WeatherTech mats in the future.
  • Re: Life With Accord: 12,000 Miles

    Nick_515 - I’d like to second that. Jack care to tell us about your tickets in your life some day? I mean i know being pulled over isn’t as sexy as tales of...
  • Re: Chart Of The Day: U.S. Minivan Market Share In 2014

    Big Al from Oz - @stuki You are correct. It’s more or less a pimped cargo van, but re-engine with a 420ftlb diesel. As for those Chrysler/Dodge...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributing Writers

  • Jack Baruth, United States
  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Vojta Dobes, Czech Republic
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Cameron Aubernon, United States
  • J Emerson, United States