Renault and AvtoVAZ sign partnership agreement

Renault has signed an agreement to invest $1bn in a quarter share of AvtoVAZ and consolidate Lada sales with its own, making Russia its biggest national market.
 
Serguey Chemezov, Head of Russian Technologies, Chairman of the Board of AvtoVAZ, Anatoli Issaïkine, Head of Rossoboronexport, Boris Alyoshin, President of AvtoVAZ, Ruben Vardanian, President of Troika Dialog Group Limited, Serguei Skvortsov, President of Troika Capital Partners representing Troika Dialog Investments Limited and Carlos Ghosn, President and CEO of Renault signed several agreements on 29th February confirming a strategic partnership between AvtoVAZ and Renault.
 
Renault will invest $US1 billion for 25% + 1 share of AvtoVAZ¡¯s shares (excluding an earn-out element of the price subject to AvtoVAZ¡¯s financial performance in 2008-2009). These agreements, which ensure the implementation of the strategic partnership announced on 8th December 2007 would allow AvtoVAZ and Renault to:
 
- Accelerate the development of AvtoVAZ, renew and expand its vehicle range
 
- Grow the Lada brand while respecting its identity, in order to maintain its leadership
 
- Share technological expertise and know-how.
 
Russian Technologies and Renault will become equal shareholders of AvtoVAZ in the spirit of a long-term partnership. Once the capital of AvtoVAZ has been restructured in the first half of 2008, Russian Technologies and Renault will each own 25% + 1 of the ordinary and preferred shares of the company.
 
AvtoVAZ and Renault will share know-how and technology particularly in relation to manufacturing and marketing and with the aim of improving the attractiveness, competitiveness and overall quality of AvtoVAZ.s products.
 
AvtoVAZ will benefit from Renault¡¯s contributions in relation to platforms and power trains in order to rapidly renew and enhance the entire Lada product line. The first Lada vehicle to come from this partnership could be commercialized at the end of 2009.
 
AvtoVAZ intends to use its alliance with Renault to turn its Togliatti complex into the world¡¯s largest car assembly plant, with capacity expanded to 1-1.5m units a year, AvtoVAZ CEO Boris Aleshin told Automotive News Europe last month.
 
Sales volumes of Lada vehicles, in agreement with AvtoVAZ, will be consolidated by Renault. Consequently, Russia will become the Renault Group¡¯s main market. After 1st March, subject to EU regulatory approval, Renault will nominate five executives to join the executive committee of AvtoVAZ, four of whom come from Renault and one from AvtoVAZ:
 
- Chief Operating Officer - Yann Vincent
 
- Executive Vice-President, Plan, Product Planning and Programmes ¨C Hugues Desmarchelier
 
- Senior Vice-President, Controlling - TBA
 
- Executive Vice-President, Purchasing - Christian Muller
 
- Executive Vice-President, Engineering - Maxim Nagaytsev
 
Renault will have three of the twelve seats on the Board of Directors of AvtoVAZ and will be represented by Carlos Ghosn, President and CEO of Renault, Patrick Pelata, Executive Vice President, and Thierry Moulonguet, Executive Vice President. A Joint Strategic Committee is to decide the strategy and coordinate the activities common to both companies, each of which retains its autonomy of decision-making and strategic orientation.
 
In the light of Renault¡¯s new agreement with AvtoVAZ, media reported on Friday that the latter¡¯s pre-existing partner General Motors had begun negotiations with an alternative partner, GAZ, which is the second largest domestically-owned Russian manufacturer.
 
GM also makes cars on its own in Russia, but needs more capacity to fulfill its ambitions for growth in what is now Europe¡¯s fastest-growing car market. The Russian newspaper Vedomosti reported last week that GM and GAZ would jointly build budget cars, possibly on the Chevrolet Lacetti platform, with a $1bn investment required from GAZ. GM itself confirmed last week that it is talking with several companies in Russia, but declined to name them.
From: auto industry.uk/news

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