The Renault-Nissan alliance is the biggest foreign carmaker that has major investments in the Russian automotive industry. The recent market crisis could now turn to be an advantage for the company.
The alliance has a controlling stake in AvtoVAZ, the parent of the biggest domestic brand – Lada – and the government could soon turn this into a big asset. The Moscow officials are now mulling a subsidy scheme for the ailing car industry. The locally based Association of European Businesses (AEB) has predicted new car sales in Russia could fall as much as 12 to 13% in 2014, after big slumps in June (17%) and July (23%).
Besides the planned incentives, the French-Japanese carmaker could benefit from the continued depreciation of the local currency, which hinders its rivals because they source fewer car parts from the local market.
“Now isn’t the time to make bad decisions not to do things,” says Bruno Ancelin, Renault’s Russia boss. “It’s precisely when the market is disrupted that you should invest.”
The company official said that production cuts are under review and could be enforced if the market drops further, but on the other hand the company has no plans to stop or scale back its vehicle development strategy.