Renault has acquired a 25 per cent stake in Avtovaz, the producer of the Lada and Russia’s largest carmaker, to break into the Russian market.
Carlos Ghosn, the chief executive of Renault, signed the deal, apparently worth $1.25 billion (£600 million), at the weekend. He said: “The Russian market is booming - more than 20 per cent growth this year and significant growth in the mid-term.”
Mr Ghosn said that Avtovaz’s main plant in Togliatti could expand output to 1.5 million from its present 700,000 and eventually produce Nissan and Renault cars. Nissan is Renault’s Japanese partner.
Renault won the deal over GM, Fiat and Magna International, the parts maker. Avtovaz will have access to Renault technology and marketing expertise.
Russian Technologies, which is owned by Rosoboronexport, the Russian state arms company, is Avtovaz’s biggest shareholder and will retain a 25 per cent stake. The company said that Russian Technologies’ holding would ensure “continuous support from the Russian State”.
Renault said that the deal should turn Russia into its “main market”. The French group is forecasting that the Russian car market will grow by 60 per cent, from 2.5 million units this year to 4 million units, by 2015.
Avtovaz holds about 70 per cent of the Russian market.