With a strong pace of product launches, capacity investment to meet demand and an alliance with the leader of the Russian auto industry, AvtoVAZ, Renault has become a major player on the market and is taking part in the renewal of the country’s car market. Renault’s ambition is not just to become a leading brand in the B segment, but also to create a broad range of popular vehicles adapted to the needs of local customers.

 

Since the launch in 2005 of Logan - the first vehicle manufactured by Renault in Russia and the best-selling three-box car in the country - a number of other models have extended the range with very promising results. Sandero, complementary to Logan, already accounts for 20% of sales. Sandero Stepway is a best seller and Fluence and Mégane, launched in 2010, already rank top-ten in their segment. The Renault range in Russia now covers all segments.

 

Since end-2011, five different vehicles (Logan, Sandero, Fluence, Mégane and Duster) are produced at the Moscow plant, a record for group plants. Duster will be launched in 2012 (in two-wheel- and four-wheel-drive versions) backing up Koleos in a market where one in four cars sold is a 4x4. Renault will thus bring customers a broad range of vehicles, with core range models produced locally.

The biggest challenge for carmakers in Russia is having sufficient production capacity to meet demand. The strength of the Alliance lies in its ability to combine capacities and generate synergies between the three partners, Renault, Nissan and AvtoVAZ. The Alliance has three production sites with a total capacity of 1.1 million units a year. The objective for 2016 is 1.6 million.

 

At Renault Russia (Moscow), Renault’s first facility in the country, capacity investment in 2010 has doubled output, to 160,000 vehicles a year. AvtoVAZ (Togliatti) has a capacity of 900,000 vehicles a year with three main production lines, including a new B0 (Logan) line that will produce vehicles for the three partners starting in March 2012. The Nissan plant in Saint Petersburg manufactures 50,000 vehicles a year. The Izhavto plant (220,000 vehicles a year, to be increased to 360,000 by 2016) will further boost this capacity when included in the Group’s strategic development plan. 

The partnership, the first to include three groups (Renault, Nissan and AvtoVAZ), is also unique in its ambitions on production, integration and localization. The partners are working together to modernize the productivity and quality of production resources. In early 2011, the Alliance Production Way was applied to the new Lada Kalina line and it will be gradually extended to other activities. Also in 2011, teams of Russian engineers and technicians visited Renault group sites in countries including France, Romania and Turkey to receive training on vehicle and powertrain engineering, manufacturing and quality. The training program, launched on the initiative of and with financing by the Russian authorities, will be followed by other programs and reflects the Russian government’s concerted efforts to modernize AvtoVAZ.

 

The partnership has already made significant progress in terms of purchasing synergies. A joint committee was set up in March 2010 with 100 people (30 from Renault and 70 from AVTOVAZ) to develop the supplier network and improve parts quality. The committee has already produced tangible results. The share of faulty parts at AVTOVAZ has been divided by three since 2009 and continues to fall.

Local integration will be stepped up with the shared development of chassis and powertrains. A center is being set up to produce components, running gear, engines and gearboxes locally, exclusively for vehicles sold on the local market.

Projects are also planned to develop extra capacity in the far east of Russia, where they will benefit from geographical proximity to the sites in South Korea and Japan.