Renault Joins AvtoVAZ Bailout

by Cammy Corrigan

December 3rd, 2009 11:06 AM

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?

#AvtoVAZ #France #Ghosn #Lada #Nissan #Putin #Renault #Russia

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Kristjan Ambroz on Dec 03, 2009

The Zhiguli is the standard, Fiat 124 based Lada - one of the top 10 selling cars of all time IIRC - so not having heard of it at TTAC???

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Garak on Dec 03, 2009

I don't think they'll ever manage to kill the Zhiguli, they'll probably just update it a bit and keep it in production. The ancient Lada engine is already capable of Euro-4 emissions, so most likely they'll just tweak it to reach Euro-5 and add air bags, ABS & stability control to meet minimum safety requirements, and just keep selling the ancient car. And yes, Zhiguli is that classic boxy Fiat 124-based Lada sold as the 1200/1300/1500/1600/1700 or Riva on export markets.

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