MOSCOW - The Renault-Nissan alliance aims to increase new-car sales in Russia to 1.6 million units in the next five years as it seeks to take control of AvtoVAZ, the country's biggest carmaker.
Boosting the alliance's share of the Russian market to 40 percent is part of Renault-Nissan CEO Carlos Ghosn's new Drive the Change 2012-2016 strategy.
"As we expect the Russian market to grow to 4 million units by 2016, Mr. Ghosn's target translates in about 1.6 million units sales,"Bruno Ancelin, Renault's senior vice president for the Eurasia Region, told reporters here on July 19.
The target includes sales of Renault, Nissan and AvtoVAZ's Lada cars.
In the first half, AvtoVAZ had a 23.6 percent share of the Russian market, Renault 6 percent and Nissan 4.8 percent, for a combined 34.4 percent share. Ghosn's aim is to boost AvtoVAZ's market share to 25 percent, Renault's to 8 percent and Nissan's to 7 percent.
Renault currently owns 25 percent of AvtoVAZ. Ghosn plans to increase the Renault-Nissan alliance's stake in the Russian carmaker to 50 percent plus one share to be able to fully consolidate its results. Negotiations are currently undergoing and an agreement is expected being reached by the end of the year, Renault said.
Press reports have speculated that Renault will buy another 15 percent of AvtoVAZ and Nissan will seek a 10 percent stake.
Renault-Nissan will expand production in Russia to help meet the sales target. Currently, the alliance including AvtoVAZ has annual capacity of about 1.1 million units.
AvtoVAZ has an installed capacity of 900,000 units a year on two shifts. Ancelin said going from two to three shifts at Togliatti, where AvtoVAZ is based, would add almost another half million units in production.
Renault recently doubled annual capacity at its Renault plant in Moscow to 160,000 units in three shifts. Nissan's plant in St. Petersburg is running at its full capacity of 50,000 units a year.
Early next year, AvtoVAZ's Togliatti plant will open a new assembly line dedicated to producing Renault's no-frills Logan car for the Renault, Nissan and Lada brands.
Lada will launch two vehicles based on the Logan platform at the start of next year, including a version of the Logan MCV station wagon that it will call Largus. The other model has not been announced.
A Nissan-badged Logan will come off the line at the end of 2012 and two Renault-badged derivatives will follow starting in 2013.
The five models built by AvtoVAZ on the Logan platform for Lada, Nissan and Renault are expected to represent about 400,000 units a year, or a quarter of the 1.6 million volume the alliance has targeted for 2016.
The Russian car market has been recovering rapidly from the economic crisis of 2008 and is expected to pass Germany's as Europe's largest car market, as sales to climb 73 percent to more than 3.3 million in 2015, according to forecasts from Russia's Ministry of Industry.
Renault expects the total Russian market to grow to this year to 2.6 million to 2.7 million from 1.91 million in 2010.