The Renault-Nissan alliance has signed a deal to purchase a majority stake in AvtoVAZ, better known to us as Lada. Under the deal, Renault-Nissan will invest 23 billion roubles (742 million dollars) to take control of AvtoVAZ via a 67.13 per cent stake in a joint venture with state-owned Russian Technologies. The venture, to be completed in 2014, will own 74.5 per cent of AvtoVAZ. Russian Technologies will own 32.87 per cent of the joint venture.
The venture has ambitious plans to capture around 40 per cent of the market by 2016 and says this is feasible due to the technological inputs of Renault-Nissan and the well-established manufacturing facilities of Lada. Production will take place at a new facility in Togliatti as well as in in Moscow, St Petersburg and Izhevsk.
Commenting on the venture, Carlos Ghosn, chairman and CEO of Renault and Nissan said "Without any doubt, the Lada brand will be in the short term and the long term the largest brand in Russia for the alliance," Ghosn said and added that they were there to strengthen the brand and give it everything it needs."
