Renault SA and Nissan Motor Company are on the verge of signing an agreement to take control of Russia’s largest automaker AvtoVAZ in March.
According to AvtoVAZ CEO Igor Komarov, the parties have reached an agreement of principle. “The main issues between shareholders have been solved already. The negotiations may be completed in March,” Komarov said in an e-mailed statement quoted by Bloomberg.
Renault already has a 25 percent stake in AvtoVAZ, for which it paid $1 billion, and wants to use the carmaker’s Lada brand to further cut costs by sharing production and suppliers. The Renault-Nissan alliance has held talks with AvtoVAZ shareholders Troika Dialog and state-owned Russian Technologies to buy another 25 percent in the carmaker in order to reach a controlling stake of 50 percent plus one share.
AvtoVAZ may begin building engines and gearboxes for Renault and Nissan in 2012, as the Japanese carmaker will introduce next year a Russian-build model based on the low-cost Renault Logan range.
AvtoVAZ has produced in 2010 45 percent of the country’s total car production of 1.21 million units, with its Lada brand having 23.6 percent market share. Renault, Nissan and AvtoVAZ are aiming for 1.6 million deliveries in Russia within five years, accounting for 40 percent of the market.