Ghosn leads Renault-Nissan into Russian market

September 18
4:27 PM 2013

The partnership between Renault SA and Nissan Motor Corp had resulted in the creation of a parts procurment venture with Russia's largest automaker, OAO AvtoVAZ, This is one cost cutting measure as all three are seeking to expand their markets through a three way tie-up.

The venture is similar to the Renault-Nissan Purchasing Organization, which in its 12 year existence holds a 50% stake in the new Rusian entitty based out of Togliatti, Italy. The other half is owned by AvtoVAZ,

The Renault-Nissan partnership is in the process of acquiring AvtoVAZ, who manufactures the iconic Lada. In an agreement signed in late 2012, the company pledges the buyers to invest RUB23 billion or USD713 million. This was the plan of Carlos Ghosn, who is the Renault CEO and also of Nissan while concurrently the chairman of AvtoVAZ's board of directors. The multifaceted CEO had promised a 40% combined market share for the three companies in the Russian market by 2016.

The joint annual production capacity in Russia is 1,7 million cars a year. The deliveries from the tripartite partnership fell 8% from 2012's numbers, producing only 533,822. This figure was confirmed by the Association of European Businesses in Russia and the market share fell from 30.3% to 29.7%.

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