Russia's AvtoVAZ doubles 2011 net profit
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MOSCOW -- Russia's largest carmaker, AvtoVAZ, said on Friday its net profit more than doubled in 2011 to 6.7 billion rubles (about $215.8 million).
The maker of Russia's best-selling Lada cars said in a statement that its revenue grew 27 percent to 175.1 billion rubles in 2011 on increased demand for the brand.
Earlier this month, the Renault-Nissan alliance announced it would invest about $750 million to take a majority holding in AvtoVAZ, together with Russian Technologies Corp. The companies aim to complete the deal by mid-2014.
The investment will include about $300 million from Renault and the remainder from Nissan. Renault already purchased 25 percent of AvtoVAZ for $1 billion in 2008.
Carlos Ghosn, CEO of both Renault and Nissan, is looking to the Russian company to help fuel growth in the country, where the market may reach 4 million annual sales in 2015, surpassing Germany to become Europe's biggest, as rising incomes and a surge in consumer spending drive consumers toward showrooms.
Last year, 2.65 million cars and light commercial vehicles were sold in the country, with the market expected to reach 2.9 million this year.
AvtoVAZ aims to hold 25 percent of the Russian auto market in five years, or 40 percent together with Renault and Nissan.
With a combined share of nearly 33 percent currently, Russia is the alliance's third-largest market after China and the United States.
Sales of Lada vehicles rose to 578,400 in 2011, translating to a market share of 21.8 percent.
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