Renault Nissan takes over Avtovaz-Lada to become the third-biggest auto force in the world

Renault Nissan announced a big step in the Russian market on Thursday, heading for control of the Lada brand to become the third-biggest auto force in the world. Avtovaz owns one of the biggest car factories in the world at Togliatti, a town on the banks of the Volga River about 1,000 kilometers from Moscow where the company has its headquarters. The company plans to raise production to nearly 1.4 million vehicles per year by 2015. The move by Renault Nissan to control Russian auto group Avtovaz, for $750 million, highlights the importance of the Russian market, the third biggest for the three manufacturers, after China and the United States.

Since 2008, Renault has owned 25% of Avtovaz. The deal, organized via a new joint holding company, will cost Renault $300 million. Nissan, which will not own any of the capital, will provide $450 million. The deal, under negotiation for months, will make Renault-Nissan-Avtovaz the third-biggest auto group in the world. The statement said that the total sales of cars and commercial vehicles in Russia, across all brands, amounted to 2.65 million vehicles in 2011 and was expected to rise to 2.9 million in 2012. Renault Nissan and Avtovaz accounted for 878,990 of this total, and of their production 578,387 vehicles bore the Lada brand.

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