AvtoVAZ is Russia’s No. 1 vehicle manufacturer with a 23% share of the local market. It has the capacity to produce more than 1 million vehicles/year.

AvtoVAZ is an entry-level full-line manufacturer. It has a range of 15 models including Lada Kalina, Lada Priora and Lada 4х4.

In 2006, AvtoVAZ posted net profit of RUB 2,512 million (€70.5 million), up 79.4% on the previous year. In 2007, the company set a new sales record with 663,500 vehicles sold.

By becoming a major shareholder in AvtoVAZ with a stake of 25%, Renault is consolidating its presence on Russia’s fast-growing automotive market.

The alliance between Renault and AvtoVAZ is strategic for both partners.

Accelerate the growth of AvtoVAZ and strengthen its brand image

• AvtoVAZ will use Renault’s vehicle platforms and transmissions to renew the technologies used by the Lada brand.
• AvtoVAZ will take advantage of synergies with Renault-Nissan Purchasing Organization (RNPO) to obtain better quality from its suppliers.
• A number of senior executives from Renault have been placed in key positions in order to help the Russian brand improve product scheduling, engineering processes and quality.

Create value and boost Renault’s growth on the Russian market

• AvtoVAZ is a profitable company with an operating margin of 4.7% (end-2007).
• It has the potential to bring high returns (production equipment already largely depreciated, increased production capacity, etc.).
• The first two licenses were sold to AvtoVAZ for €220 million. Other licenses could also be sold, thus increasing cash flow for Renault in the short term and economies of scale in the medium term.