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?