Renault and the Russian government have signed a memorandum of understand to help save troubled carmaker Avtovaz.
In a ceremony in Paris, Russian Prime Minister Vladimir Putin met with the Prime Minister of France, François Fillon and representatives from both carmakers including Christian Estève, Senior Vice-President of the Renault group and President of its Eurasia region and Igor Komarov, President of Avtovaz to sign the agreement.
The Russian government has pledged 75 billion roubles (equivalent to around €1.67 billion) to reimburse bank debt and cover the company’s short-term cash needs while Renault has agreed to €240 million (10.8 billion rubles) of in-kind support but no financial investment.
Renault which owns a 25 per cent share in Avtovaz will support the carmaker through the transfer of technologies, production machinery, equipment and expertise in support of the production of new vehicles based on the B0 (Logan) platform. Renault will also help Avtovaz develop a new entry-level vehicle to replace the Lada Classic and create new powertrain production capacity.
Renault along with is alliance partner Nissan, hope that the measure will enable Avtovaz’s plant in Togliatti to produce 900,000 vehicles per year by 2015, allowing Avtovaz to maintain its market share in Russia at 25 per cent and develop export operations.
The Russian carmaker, which owns the Lada brand will continue to produce Lada vehicles to at least 70 per cent of its Togliatti plant total production volume.
Avtovaz, which employs about 100,000 people, has repeatedly warned it could file for bankruptcy if unable to secure financial support.
