Ghosn says AvtoVAZ should sell all non-automotive assets
TOKYO -- Carlos Ghosn, CEO of Renault and Nissan, the two automakers planning to take a controlling stake in carmaker AvtoVAZ, said that the Russian company should sell all of its assets that are unrelated to making automobiles.
"There are plenty of assets which are not dedicated to this," Ghosn said in an interview in Yokohama, Japan, on Friday. "From the beginning, we've said that we're not particularly interested in these assets. So all these assets in our opinion can be sold and put at better use."
Renault and Nissan said earlier this month that they plan to invest $750 million to form a venture with Russian Technologies Corp. that will own 74.5 percent of Russia's largest carmaker by 2014. Jeremie Papin, the lead negotiator for the Renault-Nissan alliance, said at the time that AvtoVAZ's auto-supplying and social-related activities may be among assets targeted for disposal.
As of the end of March, AvtoVAZ, which makes the best-selling Russian brand Lada, listed non- automotive assets included stakes in a printing house and financial companies, holdings in a national racing series and riverside resorts, as well as ownership of a property-development company, according to the AvtoVAZ's Web site.
Ghosn said he stood behind AvtoVAZ CEO Igor Komarov and offered to provide support. "He is in fact responsible and accountable for the results of AvtoVAZ and we'll give him all the necessary support -- management support, technological support, product support," Ghosn said. "I trust him and I think he can carry the company further."
Renault and Nissan are looking to the company to fuel growth in Russia, which the government estimates may surpass Germany to become Europe's biggest auto market in 2014. As part of the preliminary agreement, Russian Technologies agreed to repay part of its outstanding loans in AvtoVAZ by selling some of the automaker's "non-core assets," according to the statement two weeks ago.
On Monday, the Moscow-based Association for European Businesses (AEB) said Russian sales of cars and light commercial vehicles rose 14 percent in April to 266,267. Lada sales fell 11 percent to 50,102, while demand for Renault, the No. 2 brand rose 24 percent to 17,914.
Source: Bloomberg and Automotive News EuropeContact Automotive News