Renault Joins AvtoVAZ Bailout

by Cammy Corrigan

Published: December 3rd, 2009

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

Cammy Corrigan

More by Cammy Corrigan

Comments

Join the conversation

2 of 5 comments

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???

Like Reply
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.

Like Reply

Recent Comments

EBFlex Garbage but for less!
FreedMike I actually had a deal in place for a PHEV - a Mazda CX-90 - but it turned out to be too big to fit comfortably in my garage, thus making too difficult to charge, so I passed. But from that, I learned the Truth About PHEVs - they're a VERY niche product, and probably always be, because their use case is rather nebulous. Yes, you can run on EV power for 25-30 miles, plug it in at home on a slow charger, and the next day, you're ready to go again. Great in theory, but in practice, a) you still need a home charger, b) you paid a LOT more for the car than you would have for a standard hybrid, and c) you discover the nasty secret of PHEVs, which is that when they're on battery power, they're absolute pigs to drive. Meanwhile, to maintain its' piglike battery-only performance, it still needs to be charged, so you're running into all the (overstated) challenges that BEV owners have, with none of the performance that BEV owners like. To quote King George in "Hamilton": " Awesome. Wow." In the Mazda's case, the PHEV tech was used as a performance enhancer - which worked VERY nicely - but it's the only performance-oriented PHEV out there that doesn't have a Mercedes-level pricetag. So who's the ideal owner here? Far as I can tell, it's someone who doesn't mind doing his 25 mile daily commute in a car that's slow as f*ck, but also wants to take the car on long road trips that would be inconvenient in a BEV. Meanwhile, the MPG Uber Alles buyers are VERY cost conscious - thus the MPG Uber Alles thing - and won't be enthusiastic about spending thousands more to get similar mileage to a standard hybrid. That's why the Volt failed. The tech is great for a narrow slice of buyers, but I think the real star of the PHEV revival show is the same tax credits that many BEVs get.
RHD The speed limit was raised from 62.1 MPH to 68.3 MPH. It's a slight difference which will, more than anything, lower the fines for the guy caught going 140 KPH.
Msquare The argument for unlimited autobahns has historically been that lane discipline is a life-or-death thing instead of a suggestion. That and marketing cars designed for autobahn speeds gives German automakers an advantage even in places where you can't hope to reach such speeds. Not just because of enforcement, but because of road conditions. An old Honda commercial voiced by Burgess Meredith had an Accord going 110 mph. Burgess said, "At 110 miles per hour, we have found the Accord to be quiet and comfortable. At half that speed, you may find it to be twice as quiet and comfortable." That has sold Mercedes, BMW's and even Volkswagens for decades. The Green Party has been pushing for decades for a 100 km/h blanket limit for environmental reasons, with zero success.
Varezhka The upcoming mild-hybrid version (aka 500 Ibrida) can't come soon enough. Since the new 500e is based on the old Alfa Mito and Opel Adam platform (now renamed STLA City) you'd have thought they've developed the gas version together.