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Avtovaz Renault tie up sees upside in low cost models

Avtovaz says it will create a world-class car for Renault, which costs less than the French firm’s budget Logan. Russia’s troubled auto giant says it’s already seeing benefits from the alliance.

When French carmaker, Renault, bought a blocking stake in Avtovaz, the key target was thought to be its skilled workforce. Avtovaz has plenty spare – the vast Togliatti plant uses a third of its million car a year capacity. But Maxim Nagaitsev, Head of Sales at Avtovaz the Lada maker claims what Renault really wants, is its know-how to sell cars for even less than its $10,000 Logan.

“No I don’t think it's the capacity, I think that Renault wants to utilize our knowledge, how we can build a car even cheaper than Logan.”

Nikolay Karagin, Chairman of the Avtovaz Trade Union adds that other industry leaders are now showing fresh interest in the company.

“Renault’s entry shows that you can work with us. Magna, Bosch and Siemens have been here, asking how they can participate in new projects.”

Avtovaz has form producing cheap cars. Bosses told this channel they’ll export these new Kalina superminis to Western Europe from 2010. They cost just $7,600.