Renault Joins AvtoVAZ Bailout

Cammy Corrigan
by Cammy Corrigan
renault joins avtovaz bailout

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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  • Kristjan Ambroz 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???

  • Garak 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.

  • Dusterdude @El scotto , I'm aware of the history, I have been in the "working world" for close to 40 years with many of them being in automotive. We have to look at situation in the "big picture". Did UAW make concessions in past ? - yes. Do they deserve an increase now ? -yes . Is their pay increase reasonable given their current compensation package ? Not at all ! By the way - are the automotive CEO's overpaid - definitely! (That is the case in many industries, and a separate topic). As the auto industry slowly but surely moves to EV's , the "big 3" will need to be producing top quality competitive vehicles or they will not survive.
  • Art_Vandelay “We skipped it because we didn’t think anyone would want to steal these things”-Hyundai
  • El scotto Huge lumbering SUV? Check. Unknown name soon to be made popular by Tiktok ilk? Check. Scads of these showing up in school drop-off lines? Check. The only real over/under is if these will have as much cachet as Land Rovers themselves? A bespoken item had to be new at one time. Bonus "accepted by the right kind of people" points if EBFlex or Tassos disapproves.
  • El scotto No, "brothers and sisters" are the core strength of the union. So you'll take less money and less benefits because "my company really needs helped out"? The UAW already did that with two-tier employees and concessions on their last contract.The Big 3 have never, ever locked out the UAW. The Big 3 have agreed to every collective bargaining agreement since WWII. Neither side will change.
  • El scotto Never mind that that F-1 is a bigger circus than EBFlex and Tassos shopping together for their new BDSM outfits and personal lubricants. Also, the F1 rumor mill churns more than EBFlex's mind choosing a new Sharpie to make his next "Free Candy" sign for his white Ram work van. GM will spend a year or two learning how things work in F1. By the third or fourth year GM will have a competitive "F-1 LS" engine. After they win a race or two Ferrari will protest to highest F-1 authorities. Something not mentioned: Will GM get tens of millions of dollars from F-1? Ferrari gets 30 million a year as a participation trophy.