Ghosn credits AvtoVAZ's management team with keeping its financial loses under control despite Russia's dramatic decline.
TOKYO -- Renault-Nissan CEO Carlos Ghosn says the alliance's brands -- including Lada, Datsun and Infiniti -- are well positioned to benefit once Russia’s multi-year sales slumps ends.
"There will be light at the end of the tunnel and we are preparing for when the light comes," Ghosn said. He did not say when the he expects the turnaround to begin. "We will just have to be patient," he said.
Ghosn is not overly concerned about mounting financial losses at Lada’s parent, AvtoVAZ, which this week reportedthat its operating loss for the first nine months widened to 14.5 billion rubles ($229.4 million) from 10 billion rubles during the same period last year.
"I don’t know of any carmaker making money in Russia today," Ghosn said last week at the auto show here. "I don’t think singling out AvtoVAZ is fair. It is mainly concentrated in Russia. This market flirted with 3 million cars a year [in 2012] and now we are around 1.5 million. It is a dramatic reduction."
Ghosn also praised what AvtoVAZ CEO Bo Andersson and his team have accomplished despite the market’s steep decline.
"Without the efforts of the management of AvtoVAZ the results would be even more dramatic. I think they are doing whatever they can to shore up the operation," Ghosn said. "If the losses were due to complacency, lack of competitiveness or passiveness then the tolerance would be zero."
Renault-Nissan owns a 67 percent stake in the joint venture that controls AvtoVAZ.
Through nine months Lada's sales in Russia were down 28 percent to 203,462 while the overall market was down 33 percent to 1,192,723, according to data from the Moscow-based Association of European Businesses in Russia.
Of the five brands sold by the alliance in Russia, Lada's decline is the least severe with Nissan recording the biggest decline in percentage terms (39 percent).
A bright spot for the alliance is entry-brand Datsun, which only recently launched in Russia and sold nearly 26,000 cars through three quarters. The brand already has a 2.2 percent share of the market, which matches Ford and is better than Mazda’s 1.8 percent share.
Through nine months Renault-Nissan and AvtoVAZ had a 32.7 percent share of the Russian market.