Togliatti, Russia – 04 April 2012 - Russian Prime Minister Vladimir Putin inaugurated a new car manufacturing facility today, marking the latest milestone in the expanding Renault-Nissan Alliance and AVTOVAZ partnership. €400 million were invested into this 250,000-square-meter industrial complex, which will take full advantage of the Renault-Nissan Alliance’s expertise in engineering and cost savings.
The line has a maximum capacity of 350,000 cars per year and will produce vehicles for the three brands – Renault, Nissan and AVTOVAZ. Production starts with two new Lada models, followed by a Nissan vehicle later in 2012, and two Renaults in 2013. Five separate models will be produced across the three companies, reducing costs while preserving the unique characteristics of each brand.
The partnership started in 2008, when Renault bought a 25% stake in AVTOVAZ and began the transfer of technology and know-how to AVTOVAZ manufacturing facilities. In parallel to the expansion in Togliatti, the companies are in the final stages of negotiations to increase the Renault-Nissan Alliance’s stake in AVTOVAZ.
This new production tool installed in Togliatti contributes to the three partners’ common goal: achieve capacity of at least 1.6 million vehicles per year in Russia by 2016. The Alliance sold 878,990 cars in Russia last year – including 578,387 Ladas.
With a market share of nearly 33 percent, Russia is the Alliance’s third-largest market after China and the United States. Russia is the fastest growing economy in Europe and should remain in the forefront for several decades, thanks to the surge in upper- and middle-class consumers in the region. More than 10 million Russian households earn more than US$50,000 per year. The consulting firm Ernst & Young forecasts that Russia will overtake Germany as Europe’s biggest auto market in 2015 with approximately 3.4 million new cars sold.
The Renault-Nissan Alliance is a strategic partnership between Paris-based Renault and Yokohama, Japan-based Nissan, which together sell one in 10 cars worldwide. The companies, which have been strategic partners since 1999, sold 8.03 million cars in nearly 200 countries in 2011. In addition to AVTOVAZ, the Alliance operates strategic collaborations with automakers including Germany’s Daimler, China’s Dong Feng, and India’s Ashok Leyland.
AVTOVAZ is one of the biggest carmakers in Europe and the leading auto manufacturer in Russia. Company manufacturing capacities allow for production of 945,000 cars annually (including the new Togliatti assembly line). In 2010, AVTOVAZ posted net profit of 3.6 billion rubles; in the first half of 2011, net profit amounted to 6.4 billion rubles.