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30 Jan, 2008 13:22

Avtovaz and Renault promise $7,000 car

The link up between Avtovaz and French carmaker Renault has been highlighted at the Russia Forum, with both the Renault CEO Carlos Ghosn and Avtovaz chief Boris Alioshin highlighting the benefits of the strategic partnership.

Speaking to RT, Carlos Ghosn said that the purchase of a 25% stake in Avtovaz would enable the French carmaker better access to a fast growing economy and what will soon be Europe's largest car market.

He also noted that Renault's alliance with Nissan meant that increased co-operation between the Japanese carmaker and Avtovaz would be possible, and added that he considered Renault was buying into a strong partner.

“Avtovaz is a healthy company. That means it is a company which has today a dominant position today on the Russian market, it is a very well-known brand in Russia. And it is a company which is in need for technology and products, benchmarks from large car manufacturers. It has a very good manufacturing base and the knowledge of the Russian consumer, very good distribution network. I think it is a real partnership of ”give and take“ that both companies are going to be benefiting from,” Carlos Ghosn said.

Avtovaz head Boris Aleshin was also positive about the move, which will be finalised when Renault completes due diligence of the Russian automaker.

He is expecting the strategic stake to strengthen the technological base and management of Avtovaz, and added that a key priority would be to develop a new low cost car for sale in Russia.

“It will be necessary to produce a new, very cheap car model, costing around $US 6000-7000, but no more than $US 7300. And most likely, we are going to have more a expensive model for long-term development,” promised Boris Aleshin.