AvtoVAZ, Renault, Nissan Launch Joint Production in Russia

VIENNA – Output of the first Lada model based on a Renault platform officially is under way at the AvtoVAZ plant in Togliatti, Russia.

Russian Prime Minister Vladimir Putin joined AvtoVAZ, Renault and Nissan executives for the Lada Largus Job One celebration and inauguration of the new 2.7 million-sq.-ft. (250,000-sq.-m) operation dedicated to production of Renault B0-platform-based vehicles.

The three auto makers invested a combined €400 million ($525 million) to adapt an existing part of the Togliatti plant for annual production of up to 350,000 vehicles derived from the low-cost Dacia/Renault Logan.

The welding and assembly shops already are up and running. But until a new paint operation can be completed, Largus bodies are being painted in the modernized Lada Kalina plant.

The new facility will take full advantage of the Renault-Nissan Alliance’s expertise in engineering and cost reduction. The partnership was forged in 2008, when Renault bought a 25% stake in AvtoVAZ and began transferring technology and know-how to Russia.

“We initiated our project of a common production line in Togliatti two years ago, in the most difficult times for the economy – so it’s a great honor to see it come to fruition,” AvtoVAZ President Igor Komarov says in a prepared statement.“ Our partnership continues to grow deeper by the day.”

Renault, Nissan and AvtoVAZ people “are working hand in hand” in Togliatti, Trevor Mann, Nissan senior vice president-global supply chain management, tells WardsAuto.“We have big plans for the plant, and it is a very cross-cultural project.”

Five Lada, Nissan and Renault models will be produced in the new facility, reducing costs while preserving the unique characteristics of each brand.

The Lada Largus wagon is the Russian version of the Dacia Logan MCV with a slightly restyled front end. It will be available as 5- or 7-seater and a light-commercial vehicle dubbed the Largus Van. Russian sales of the new model will start in July.

AvtoVAZ plans to produce 27,000 Largus vehicles this year, with output rising to 70,000 units annually in the future. In addition to Russia, the Largus will be sold in other Commonwealth of Independent States countries.

Currently, Largus local content stands at more than 50%, but that ultimately is expected to increase to 72%.

The new Nissan Almera sedan will be the second model to be built in the facility, with start of production scheduled for November. Two Renault models will be added in 2013.

“Our investment in capacity for another 30 cars per hour will be completed at Togliatti by (the) middle of next year,” Bruno Ancelin, Renault senior vice president-Eurasia Region and managing director-Russia, tells WardsAuto, referring to the half of B0 production capacity destined for Renault.

Ancelin declines to reveal the Renault models to be made in Togliatti.

The new production facility contributes to the three partners’ common goal to achieve capacity of at least 1.6 million vehicles per year in Russia by 2016.

In parallel with the expansion in Togliatti, the auto makers are in the final stages of negotiations to increase the Renault-Nissan Alliance’s stake in AvtoVAZ.