The Franco-Japanese concern has been invited to the Far East.
Vladimir Putin, who only a couple of months ago warned Renault about the possibility of its share in AvtoVAZ being diluted, has had a change of heart. At a Monday meeting, the prime minister thanked Carlos Ghosn, the head of the Renault-Nissan alliance, for supporting AvtoVAZ and promised to support the parts suppliers. He also invited the Franco-Japanese alliance to participate in the construction of a car plant in the Far East.
The head of Renault-Nissan, Carlos Ghosn, had come to Russia to launch the second line at Avtoframos which manufactures Renault Logan. The plant will now produce up to 160,000 cars a year. "We have invested 6 billion roubles into increasing our production capacity in Moscow. Our chances of becoming the leaders in the Russian market are good, we have ambitious plans," he said.
The Russian projects, as well as the participation of Renault in developing a plan to rescue AvtoVAZ, were the main topics of the evening meeting between Ghosn and Prime Minister Vladimir Putin.
Back the suppliers
Carlos Ghosn asked the Russian government to support the local parts suppliers. In return he promised to help create a JV with the French, Japanese and other companies, Prime-TASS reports. "Deputy Prime Minister Igor Sechin assured us that suppliers will have support. We are ready to work, providing work for the suppliers and helping to create joint ventures with their colleagues in Japan, France and other countries," Ghosn said.
Putin told the head of the Franco-Japanese alliance that the government would discuss the plan for the development of the domestic automotive industry and the basis of cooperation with foreign partners this week. The prime minister said that relations with the partners would be "very liberal, and very open."
"Of course we expect that localisation of production will be one of the main principles. We know that after a certain level of car production in Russia is achieved, we will need to produce components and spare parts locally and the creation of enterprises with foreign capital will become desirable. We have plans for this too," the prime minister said.
Putin recalled that Russia, together with Renault-Nissan, was developing production in St Petersburg. "We invite you to take part in creating a similar enterprise in the Far East," the Russian prime minister said.
A new leader of the Russian automotive industry
Vladislav Kochetkov, an analyst with the Finam company, believes the creation of a joint venture with Renault-Nissan in the Far East is quite probable. "Today it makes no sense to import second-hand Japanese cars to the Far East. The local people are used to quality cars. So, creating a small assembly plant with a capacity of perhaps several tens of thousands of cars a year would be justified," Vladislav Kochetkov thinks.
As for further cooperation between AvtoVAZ and Renault, the expert thinks it unlikely that the French will support the auto giant by injecting cash: "Most likely the French will provide the so-called BO platform. But one should keep in mind that it costs hundreds of millions of dollars."
"The Russian side should restructure the auto giant's debts, cut its workforce and provide money," Vladislav Kochetkov believes. This is confirmed by what Carlos Ghosn had to say. In his opinion, the measures being taken by Igor Komarov, the director-general of the Togliatti plant, are effective. They will ensure total modernisation and make AvtoVAZ an effective company. "The director-general of AvtoVAZ, Igor Komarov, is responsible for the work of the enterprise. We fully support him, but he can come to us for advice," RIA Novosti quotes Ghosn.
The Russian market is rising from its knees.
Carlos Ghosn is fairly optimistic about the prospects for the Russian market: "The Russian market is rising from its knees, the rock bottom has been hit and it will start recovering at a higher rate beginning in 2010."
The Renault-Nissan alliance is completely ready to take part in government programmes that will restore the Russian auto industry. The first programme on the agenda is the disposal of old cars.
"The programme benefits Renault. The company's products are sure to become the second most popular after AvtoVAZ cars," Sevastyan Kozitsin, an analyst with BKS, said in an interview with Gazeta. He notes that production expansion just happened to coincide with the launching of the programme and it would be wrong to think that Renault had decided to increase output to time with the start of the campaign to dispose of junk autos.
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Debt rescheduling
It was reported in early February that AvtoVAZ owed 37 billion roubles to the state corporation Rostekhnologii and 38 billion roubles to the banks. Komarov said that the programme of debt rescheduling would be finalized with the banks within days. "The programme of debt restructuring and all the associated issues are being discussed. I think we will reach an agreement within a few days and we will report our results," the head of AvtoVAZ said.
Asatur Bisembin
