The Truth About Cars » AvtoVAZ The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 24 Jul 2014 17:47:59 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » AvtoVAZ Nissan Will Aim Datsun Brand at Russian Used Car Buyers Wed, 18 Dec 2013 11:00:04 +0000 datsungo-450x273

Nissan last sold a car branded as a Datsun in 1981, but it’s bring the brand back for emerging markets like Indonesia, India, Russia and South Africa. The low cost brand will be launching in April in Russia with a starting price below RUB400,000 ($12,100) and go on sale there in late summer or early fall. Nissan is hoping that the new/old brand will attract consumers that had been considering used cars.

“The main objective (in Russia) is to be a serious alternative to the used car market – this is where we want to compete,” Jerome Saigot, director of Datsun’s operations in Russia, told Reuters. Though Russia has a growing middle class with disposable income, an aging fleet and relatively few per capita cars, the Russian economy has slowed and analysts expect new car sales to be down between five and six percent from last year. About six million used cars change hands in Russia every year.

Saigot said that there is is room for growth in lower-cost cars. About one fourth of new vehicle sales in Russia are in the sub-RUB400,000 segment, representing about 700,000 units. That figure is expected to rise to 900,000 cars by 2017 as the overall market grows.

“It is a big piece of the market where we don’t have any offer in the Nissan line-up,” Saigot said. “The risk here is to do nothing.”

The Datsun car will be assembled by Nissan’s Russian partner Avtovaz at their Togliatti factory, and it will share a platform with the next generation Lada Kalina. Though the Datsun theoretically will be priced about the same as Avtovaz’s own Lada, Saigot insists that the two brands are targeted at different groups of consumers. Datsun will be aiming at first time car buyers.

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Junkyard Find: Lada Niva Tue, 26 Nov 2013 14:00:56 +0000 01 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee MartinWhen I went to Iceland to abuse some Subarus, I managed to visit a couple of Reykjavik junkyards and poke around a bit. In addition to the weird-to-American-eyes French cars and puzzling quantities of 1990s Chrysler products, I found this VAZ-2121 aka Lada Niva 3-door wedged nose-to-tail with a green Megane.
05 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee MartinThe car’s doors were locked and the yard’s proprietor didn’t speak much English, so I couldn’t determine this Russian’s year of manufacture. The marker lights and some comments by Lada-admiring Icelanders later suggest that this car is from the early 1980s.
07 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee MartinThere’s no way this car could have competed in the United States market, what with all the cheap Subarus, reliable Toyota Tercel 4WDs, and the perception that Ladas were just Fiats built by enslaved Stakhonovites in dirt-floored tents in the Gulag. Elsewhere, however, the Niva built up a reputation for T-34-grade toughness.
02 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee MartinThese days, the Niva’s appeal in Iceland has waned, and so this car will likely end up getting crushed soon.

Not many products benefit from association with the Soviet Union. The AK-47 and the Niva, that’s about it.

That’s how you treat a Lada.

In Iceland, they’re a little rougher on their Ladas.

01 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee Martin 02 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee Martin 03 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee Martin 04 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee Martin 05 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee Martin 06 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee Martin 07 - Lada Niva Down on the Reykjavik Junkyard - Picture Courtesy of Murilee Martin ]]> 34
Renault-Nissan In Charge At Russia’s Largest Carmaker Wed, 12 Dec 2012 13:04:17 +0000

With the stroke of a few pens putting signatures under a contract in Moscow today, then Renault-Nissan Alliance has become Russia’s largest automaker. The Alliance took control of AVTOVAZ, maker of the market-leading Lada brand. Lada holds 30 percent of Russia’s rapidly growing car market.

The Renault-Nissan Alliance entered a joint venture with the Russian Technologies State Corporation.  Renault-Nissan will hold 67.13 percent of the joint venture by mid-2014. The joint venture will then hold 74.5 percent of AVTOVAZ. Renault purchased 25 percent of AVTOVAZ in 2008 and then helped AVTOVAZ in its successful turnaround, mainly by replacing outdated Lada cars with Dacia technology.

Two new Lada models, the Largus and Granta, have attracted high demand and the company is sitting on a backlog of six months’ worth of orders, Reuters says.

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In Post-Soviet Russia, Renault-Nissan Buys AvtoVAZ Fri, 04 May 2012 13:47:06 +0000

Renault-Nissan is buying a majority stake in Russian automaker AvtoVaz. For those not in the Russian Car Appreciation Society, AvtoVaz is the maker of Lada cars.

Current owner (and weapons maker) Russian Technologies will enter a joint-venture with Renault-Nissan as a means of structuring the deal. Renault-Nissan will own 67.13 percent of the JV, which will in turn have  a 74.5 percent stake of AvtoVaz. Following the necessary due diligence, the deal is expected to be completed in 2014.

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Pfffft: The Air Escapes From The Big Nissan-Renault-AvtoVaz Takeover Story Fri, 17 Jun 2011 20:33:59 +0000

Yesterday, The Nikkei was all worked up about a takeover of Russia’s largest automaker AvtoVaz by the Renault-Nissan Alliance. The Nikkei became so excited that it forgot simple logic. More on that here. The Nikkei had it on not so good authority that Nissan would soon buy 25 percent of the Russians, and together with Renault’s 25 percent and change, Japan and France would finally achieve what had been tried before: Rule Russia. We had our doubts.

Do you hear the big hissing sound? That’s the lukewarm air coming out of the story. Today, Financial Times Germany, along with what looks like all of the German press, writes that Nissan plans to buy a whopping 4 percent of AvtoVaz. Yes, four. Even that is not cast in stone. Sergey Chemezov, head of the sprawling Russian government holding Rostechnologii, told the Russian news service Interfax that Nissan intends to buy four percent of AvtoVaz from Rostechnologii. Rostechnologii will reduce its holdings down to the blocking minority of 25 percent. Depending on the by-laws of a corporation, a blocking minority has veto power.

Why the fascination of the Germans with Chemezov? He’s a colorful man. He worked as an undercover agent in Dresden, East Germany, while Vladimir Putin was the KGB rezident there. His official resume glosses over this tidbit. Was Chemezov telling theb truth? Did Interfax write it as it was said? We’ll never know.

There are other parties in Russia that hold AvtoVaz stock. They may or may not be interested in selling. But currently, that’s all there is to the story.

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France, Russia Considering Swapping Stakes In State-Owned Automakers Wed, 30 Jun 2010 15:04:39 +0000

You take some of my rescued state-owned automaker, and I’ll take some of yours. That seems to be the cunning plan cooked up by presidents Putin and Sarkozy, as the two face the prospect of rescuing struggling firms in the midst of a weak European market. And actually, it seems that the idea was really Putin’s. French-owned automaker Renault is “more than happy” with its 25 percent stake in the moribund Russian automaker AvtoVAZ, reports Bloomberg, but Russia is offering to buy 15 percent of the French firm if France in turn takes on more AvtoVAZ equity. Considering that Reanult paid $1b for 25 percent of a firm that has been kept alive only by government intervention, a closer embrace of VAZ does not seem advisable. Nor, frankly, does any form of “Franco-Russian Leyland” sound like a good idea.

But Putin knows VAZ needs platforms for future cars to compete with the Western automakers building high-quality cars in Eastern Europe. He tell ITAR-TASS

We very much hope that Renault and we will go further and a new platform for five car models will materialize. You can have no doubts you will have support from the government of Russia.

Russian banks tried hard to snag Opel from that other state-owned automaker, GM, in hopes of accessing competitive vehicle architectures like the Epsilon II and Delta II midsized and compact platforms. Because that deal fell through largely due to concerns over intellectual property protections in Russia, Putin is also moving to allay potential Renault concerns over just handing a platform over in exchange for equity in a problematic firm. He speaks to the concern in People’s Daily, saying

To steal a delicious piece of technology from an owner’s table and consume it under the blanket — we don’t have such a practice in the Russian Federation. Are there any victims due to technology transferring? Just point me out to them. Everything is for sale. Modern technology is a commodity

Which is why Putin’s Lada has an Opel engine. Perhaps a better argument would have been that state-owned automakers are a commodity.

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Nissan-Renault Ghosn For Third Place? Wed, 02 Jun 2010 15:18:09 +0000

No sooner had TTAC posted its list of Top Ten Automakers (by volume), than Renault-Nissan CEO Carlos Ghosn weighed in on his firms’ chances of moving on up. He tells Reuters:

Very likely this year, we should be in the top three

Volkswagen is currently in third place, with 6,290,000 units built in 2009. Nissan was in eigth place last year with 2,744,562 units (down 19 percent), while Renault came in tenth with 2,309,188 units (down 4.5 percent). Combined, the two firms accounted for 5,053,750 units, or about 1.2 billion units fewer than VW’s third-place showing (and only a few hundred thousand better than Ford, in fourth place).

With VW enjoying strong growth in China, and less dependent on volatile mature markets than Renault-Nissan, that will be a tough goal to deliver on. But thanks to a new partnership with AvtoVAZ, Ghosn thinks Nissan-Renault will hit 7m units this year. Even if it does though, VAZ’s financial woes and embroilment with the Russian state may cause more headaches than its incremental, low-volume Russian-market sales are worth. As history teaches, there’s more to the global auto game than pure volume.

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Putin Loves His (Customized) Lada Mon, 25 Jan 2010 19:50:04 +0000

Russian President Vladimir Putin first showed off his badass camo Lada Niva early last year, in an attempt to boost the fortunes of the floundering state-supported Russian automaker AvtoVAZ. What Putin didn’t reveal until just now is that his Niva isn’t exactly stock.”I won’t hide it [anymore?] , the car I bought has an Opel engine,” he tells the WaPo. “It turns out that it’s more powerful.” Now wonder Russian parliamentarians are starting to advocate dumping AvtoVAZ on Renault, which in turn is drawing a familiar homerism from local pols in Russia’s Detroit, Tolyatti. In other car-salesman-in-chief developments today, Barack Obama revealed that he believes GM is a world-class automaker because his Cadillac is so badass.

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Renault Joins AvtoVAZ Bailout Thu, 03 Dec 2009 14:51:30 +0000 LadaLogan? (

Renault may be playing Russian Roulette, but at least it seems the French automaker is finally playing nicely with Avtovaz and the Kremlin. Maybe the thought of ending up like Mikhail Khodorkovsky spurred Carlos Ghosn into action? Or maybe Ghosn came around when he found out that the Kremlin is going to put $1.7 billion into the ailing Russian car maker. The St. Petersburg Times reports that Renault will invest a mere €300 million in the form of of a technology transfer so that Avtovaz can start building the Logan, Renault’s smash hit in Eastern Europe. It’s like the Fiat-Chrysler deal, only cheaper! Renault will also help Avtovaz develop a new car to replace the Zhiguli (I’d never heard of it, either). Some of this production will happen in Russia’s far east and Renault’s Japanese subsidiary is there to help!

“Moreover, AvtoVAZ, with the help of Renault — in this case I am referring to its Japanese unit Nissan — will launch car production in the Russian Far East,” Russian Prime Minister Vladimir Putin said. Nissan will put forward €60 million of €300 million Renault pledged. Curiously, Autovaz also has goals which it must attain to keep this help flowing in. AvtoVAZ’s market share must not drop below 25%, with 70% of that figure made up of Lada sales. A bailout with clearly defined goals? That’s novel!

In completely unrelated news, Vladimir Putin and French Prime Minister Francois Fillon met up for a 2 day meeting which involved the signing of a number of agreements, which included, Electricité de France buying a 10% stake in the South Stream pipeline. It’s nice to see Franco-Russian relations warming, but as petrolheads this doesn’t bring much to our table. Who’s excited at the prospect of car engineered by Renault, built by Avtovaz and sporting a Lada badge?

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Renault Plays Russian Roulette Mon, 16 Nov 2009 19:40:21 +0000 Russia and VAZ are tight like that...

Renault may be about to learn the folly of buying into a Russian company with close ties to the Russian government instead of establishing a presence of their own. Renault recently took a 25% stake in Avtovaz and things have gone from bad to worse. Avtovaz cut its staff by 25% and is now teetering on the brink of bankruptcy. Which is why Russia’s deputy prime minister, Igor Shuvalov, on Sunday said “If the Renault-Nissan alliance wishes to increase its participation to the point where it takes control, Russia will not be against it,”. He then went on to say “we will have to go to other potential partners and investors,”. These are the words which Renault should pay close attention to.

There is a general rules of thumb if you want to do business in Russia, the Kremlin always gets its way. Want proof? Look at Yukos and TNK-BP. Both are cases where the Kremlin got involved and got its way. In the case TNK-BP, they forced a change of management so that it was Russian tilted and in the case of Yukos, well, the CEO is now in a Siberian prison. But despite this, Renault is feeling brave by saying they will take part in restructuring but not increase their stake. Renault can’t value the Russian market too much because if they annoy the Kremlin too much, life could be made very hard for them in the land of Vodka and cossack dancing. Just ask Mikhail Khodorkovsky.

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