Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Renault to Invest $300M in City Plant

Unknown
France’s leading automaker, Renault, plans to expand its local car production and raise investment in the next few years, Renault’s Moscow joint-venture officials said.

Renault, which set up the Avtoframos joint venture with the Moscow city government in 1998 to sell and manufacture its cars locally, last year started assembling Megane cars for the local market.

The next model to roll off Avtoframos’ production lines is Clio Symbol with target output of 2,000 to 3,000 per year, Avtoframos officials said Wednesday at a news conference.

"The total volume of investment into this project is $300 million," said Guy Bara, Avtoframos managing director.

"With this money we plan to start automobile production, including an assembly line and a paint shop. We also plan to develop a dealers network, which now includes 28 dealers."

Renault has invested 672 million francs ($92 million) to design the Clio Symbol, which has been specially adjusted to local harsh weather and road conditions.

Avtoframos deputy financial director Serge Glandard said Renault had already invested about $60 million in the new project and would invest another $240 million in the next few years, depending on the local economic situation.

The new model will go on sale next week, and its local assembly will start in the next few months, Bara said.

Avtoframos plans to boost its local sales to 4,000 cars this year from 1,150 cars in 1999.

Meanwhile, Russia’s second-largest carmaker GAZ expects local governments to decide on its offer to buy a stake in its joint venture with Italy’s Fiat in September, a GAZ official said Wednesday.

GAZ has proposed selling half of its 40 percent stake in the Nizhegorod Motors venture to the governments of the city of Nizhny Novgorod and the Nizhny Novgorod region, where GAZ is located.

"City and regional administrations are considering options of their participation in the joint venture Nizhegorod Motors. I think we will hear from them in September," said Gennady Suvorov, the GAZ president’s adviser.

He declined to give any details on the offer, saying they would be discussed with Fiat and the European Bank for Reconstruction and Development, a third party in the project.

GAZ and Fiat signed an investment agreement in March to set up a factory that would begin making cars for the Russian market by 2002, although the project has been delayed a number of times and no construction has begun. Suvorov said the existing breakdown of the joint-venture ownership, where Fiat holds 40 percent and the EBRD 20 percent, would not change if the regional governments agreed to the deal.