PARIS - Renault will not start its Russian venture on schedule if the country's financial situation remains unpredictable.
Back from a trip to Moscow in early September, Manuel Gomez, vice president in charge of international operations, said in an interview with Automotive News Europe that he wanted to remain 'maneuverable' in the face of the Russian crisis.
'It's a serious crisis. It will partly alter the landscape. Renault and other carmakers will adapt to the situation,' Gomez said.
In the long term, Renault intends to open its joint venture plant.
'In the short term, we need to be very cautious,' he said. 'If necessary we will slow down the rhythm of our commitments.'
Gomez met with Valery Chantsev, the deputy mayor of Moscow. In November 1997, Renault and the city of Moscow agreed to set up a joint venture to start kit production this year. By 2005, it would produce 120,000 Meganes. Moscow will provide the plant. It will be in a factory complex owned by AZLK, the Moskwich carmaker in which the city holds a majority stake.
The overall project amounts to $420 million, including a $320 million capital expenditure and $60 million for engineering.
Up to now, Renault has spent $10 million on the Russian venture. The joint venture, OAO Avtoframos, was established 2 July in Moscow. Valery Chantsev is chairman and Guy Brana, previously manager at Renault's Douai plant, is chief executive officer.
The first step will be assembling 2,000 Meganes from kits in the AZLK plant. The facility is prepared, said Gomez, and a 10th of the employees have been hired.
Renault still hopes to start on schedule, but the decision is on hold.
'We will pull the trigger if things become more clear,' said Gomez.
Renault sold 2,600 cars in Russia in 1997, mostly R19s and Megane sedans imported from Turkey. This year, it will sell around 4,000 units, down from a forecast of 7,000.