Install

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

. Last Updated: 07/27/2016

Renault to Unveil $250M Investment

PARIS -- French automaker Renault looks set to unveil a $250 million investment to build more cars in Russia this week, as it seeks to cash in on an "auto epidemic" to offset sinking demand in western Europe.

The investment has already been flagged by Renault, but there is still uncertainty over the exact timing.

Renault in Moscow said chairman Louis Schweitzer would hold a joint press conference with Moscow Mayor Yury Luzhkov on Wednesday, but declined to give further details.

Renault, Europe's fourth-biggest carmaker by sales, is expected to pump $250 million into the troubled Moskvich factory, which it runs through its Avtoframos joint venture with City Hall, in a bid to boost production of its Symbol model -- a variant of its top-selling Clio small car.

Renault has invested $68.5 million in its three-part production facility at Moskvich, but the factory currently churns out just 10 cars a day. After a cash injection, however, capacity could rise to as much as 60,000 per year, a spokesman for Renault in Paris said.

"Russia is showing signs of recovery and ... stability, and the feeling is we should be there," the spokesman said.

Schweitzer said at a news conference on Renault's 2002 results earlier this month that the firm aimed to capitalize on an emerging "auto epidemic" in Russia, and that a decision on the Moscow plant was imminent.

Renault, which already exports cars to Russia, has been mulling building cars in significant numbers in Moscow since the late 1980s.

In the fall of last year, the company said production hinged on getting the State Customs Committee to classify the components it wants to import for assembly as parts, which are taxed at a lower rate than new cars. It was not clear whether new concessions where made by the committee.

Renault boosted sales in Russia by 47 percent in 2002 to some 8,000 cars.

(Reuters, MT)