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. Last Updated: 07/27/2016

Gref Says AvtoVAZ Should Obtain New Management

AvtoVAZ should be managed by Renault or find another plan for long-term development, such as an alliance with Magna and Opel, Sberbank president German Gref said late Monday in an interview on Channel One.

Such an alliance is necessary for the auto giant to stay competitive, as its production line doesn't have a future, Gref said. It takes an investment of $1 billion to $1.25 billion to create a new automobile line, and the cash flow necessary to start one new platform every three years can only be generated by sales of at least 5 million to 6 million cars annually, he said.

A spokeswoman for Renault, Oksana Nazarova, said there were no plans being discussed about managing AvtoVAZ.

Sberbank, which owns 35 percent of Opel after purchasing the stake in partnership with Magna International, hopes to double sales of Opel automobiles from 1.4 million to 3 million cars annually within five years, Gref said, and only after that will it seek possible mergers and acquisitions for the carmaker.

Gref, a former economy minister, said earlier that Sberbank planned to sell its stake after reorganizing the unit and its Russian assets. The lender's acquisition seeks to help the technological makeover of Russia's carmaking, he said Monday.

The plan also foresees a linkup with GAZ, the carmaker controlled by billionaire Oleg Deripaska, which said on May 30 that it could produce 180,000 Opel cars a year at its main Russian site.

Mikhail Pak, an analyst at Metropol, said it was unlikely that Renault would want any part of managing AvtoVAZ and that the idea of uniting AvtoVAZ with GAZ has been discussed for a long time.

Germany's government chose Magna as the preferred bidder for Opel on May 30. Magna will take a 20 percent stake, while GM will retain 35 percent and Opel workers will get 10 percent.