Friday, February 29, 2008

Renault has signed the final agreement Avtovaz

Renault has signed the final agreement which will in the first half to enter the capital from his Russian counterpart AvtoVAZ, the maker of the Lada, against an investment of over one billion dollars (660 million euros).

AvtoVAZ is counting on Renault and its president, Carlos Ghosn, credited with the successful recovery of the Japanese Nissan, to revive the famous Lada built on the site of Togliatti on the Volga.

The president of Renault, which had concluded with the Russian group agreed in principle to this effect on December 8 last year, will enter the board of directors of AvtoVAZ with Patrick Pélata and Thierry Moulonguet, both CEO Deputy Renault.

The price paid by Renault is one of the largest investments by a French company in Russia after the agreement reached last year between the company and Total Russian export gas Gazprom to develop the giant deposit Chtokman.

It is also the largest investment made by a foreign automaker in the Russian car market, booming in recent years. Almost all major car manufacturers worldwide have opened or are committed to opening new factories in the country.

Russia has strong economic growth in the past nine years, thanks to its exports of raw materials, oil and metals.

According to analysts, Russia could soon become the first European car market.

AvtoVAZ is facing a decline in its sales, while the Russians, whose purchasing power increases, they tend to turn to the foreign brands. But it is this same purchasing power that makes Russia a target of choice for major automakers worldwide.

DOUBLE PRODUCTION AVTOVAZ

"Russia is one of the most coveted markets in the world for vehicle manufacturers," said Carlos Ghosn.

"I am very pleased that Renault had been chosen from among many candidates to be the strategic partner exclusive first Russian automobile manufacturers," he added.

Renault intends to almost double the production of AvtoVAZ to bring it to 1.5 million units by 2014, with Lada models, but also Renault.

The french group will pay one billion dollars for its 25% (plus one share) plus 166 million dollars according to the results of 2008-2009 AvtoVAZ.

AvtoVAZ already had a partnership with GM since the 90 years to produce vehicles including all-terrain jeep.

At one point controlled by his leadership, AvtoVAZ came back into the fold of the state in recent years, the Kremlin wishing to keep their hands on the industrial assets considered strategic.

The group is controlled by both the Russian arms exporter Rosoboronexport, a subsidiary of the Russian public Technologies and by the broker Troika Dialog.

Renault will buy its involvement with Troika, which will also put on the stock market in the fall of up to 25% of the remainder of its stake in AvtoVAZ to make the action more fluid.

In the long term, Russian Technologies and Renault will be shareholders in equal shares in AvtoVAZ with 25%, said a press release.

After its entry into AvtoVAZ, Renault plans to produce seven million vehicles a year. The french group plans to consolidate the results of AvtoVAZ in its accounts.

Renault, Nissan, is the number three global automotive industry, behind General Motors and Toyota.

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