In March to raise AvtoVAZ stake Renault-Nissan may sign deal

MOSCOW – Through sources it was known that in March Renault and Japanese affiliate Nissan Motor Co. may sign an agreement to buy control of Russia's largest automaker, AvtoVAZ, CEO Igor Komarov said.

"The main issues between shareholders have been solved already," he said in a statement today. "The negotiations may be completed in March."

As per the negotiation Renault bought 25 percent of AvtoVAZ for $1 billion in 2008 and is seeking to use the Russian company's Soviet-era Lada brand to reduce costs by sharing production and suppliers.

Buying control of AvtoVaz would also give Renault an advantage over other global carmakers in Europe's most populous country, where vehicle deliveries may surpass those of France this year.

"With an enormous population set to grow even bigger, it's definitely a good strategy to capture the Russian market before other carmakers enter," said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co.

"By entering the market through acquiring the biggest carmaker it will make it easier for Nissan and Renault to be accepted by the local consumers," he said.

The Renault-Nissan alliance has been in talks with AvtoVAZ shareholders Troika Dialog and state-owned Russian Technologies Corp. to purchase a 25 percent holding, for a total controlling stake of 50 percent plus one share.