What will happen to Lada in case of a break with Renault?

The French concern announced on Wednesday (March 23) that the Renault plant in Moscow has suspended work. Collaboration with AvtoVAZ was mentioned for the first time in the company’s statement. The European manufacturer has vaguely stated that it is working on various scenarios for its participation in the Russian presence.

“Concerning the stake in AvtoVAZ, Groupe Renault is considering options given the current environment and is acting responsibly to the 45,000 employees in Russia” – says in a company message.

A few hours ago, Ukrainian President Volodymyr Zelensky urged Renault to exit the Russian market,

He speaks to the French Parliament via video link. Earlier, Ukrainian Foreign Minister Dmitry Kuleba called for a boycott of Renault for refusing to leave the Russian Federation.

Pressure on the Renault concern, which continues to operate in the Russian Federation, despite sanctions (unlike most foreign automakers), began in England. Opposition politician Chris Bryant, who previously advocated sanctions against Roman Abramovich, urged the British to boycott Renault.

In 2021, AvtoVAZ transferred from the Dutch offshore to Russian jurisdiction.

In the newly created legal entity Lada Auto Holding, Renault owns a 67.61% stake, the rest is owned by the state company Rostec, which is on the US sanctions list.

After Renault’s announcement, the Russian Ministry of Industry and Trade immediately informed AvtoVAZ that they have provided all kinds of support in their loading capacity, that they have started new modifications to the cars, continued the localization program and accelerated the import substitution. The domestic producer also received state support in the form of various aids and transferred the payment of salvage fees until the end of this year.

The Ministry of Industry and Trade also promised to discuss with the Moscow government the prospects for the development of Renault’s metropolitan area. The ministry plans to announce the jointly developed decisions by 3 April.

For Renault, Russia is the third largest car sales market. Last year, more than 131 thousand cars were sold in the Russian Federation, 134 thousand in Germany and 394 thousand in France.

How to register AvtoVAZ

Russian Auto community writer Sergey Tsyganov knows that AvtoVAZ has a number of scenarios for responding to crisis situations. The source does not yet believe that both the French and Russian management of AvtoVAZ can withdraw from the capital of Renault’s Russian subsidiary.

The point is that Renault will stop its business in Moscow and possibly stop selling cars.

There are options to leave Russia, but to stay in the capital of AvtoVAZ. To leave Russia without leaving AvtoVAZ, work will be carried out in this direction, Tsyganov, citing his sources at the plant.

Shortly after the release of the Renault AvtoVAZ statement Reacted With its operational commentary warning of “active work to replace some critical imported components with alternative solutions”.

In the coming months, versions of Lada models that will be less affected by imported components will be prepared for Russian customers,

reported in the press service of the brand.

There is a possibility that Renault will exit the AvtoVAZ business, in which case the divorce of the two companies will be followed by a change of all heads of the Russian enterprise, Igor Korovkin, managing director of the Russian Automobile Manufacturers Association, of course.

The interlocutor believes that in the event of such an outcome, Rostec will take over possible control over the enterprise. AvtoVAZ will continue to use existing platforms for the production of cars, and it cannot be said that they are obsolete, the expert is sure.

“Despite the switch to domestic parts, Lada car prices will continue to rise,” Korovkin said in an interview with socialbites.ca.

The author of the Russian Auto project knows that the first special versions of the Lada will be released in May this year.

“It is not a problem to remove foreign components from VAZ cars and replace them with domestic ones,” he said.

To do this, it will be necessary to re-establish old relations with Russian component manufacturers, which the company left under Bo Andersson (a foreign manager at the head of AvtoVAZ in 2014-2016) as part of the transition to the Renault supplier panel, the source is certain. .

Some of these subcontractors continue to operate, leaving components for the secondary market. The specialist says that parts of domestic production are more expensive and worse in quality, but this will not greatly affect the cost of cars. Due to the lack of electronics, the plant is forced to simplify fuel equipment.

AvtoVAZ wants to switch to Euro-2, but not for all models, ”Tsyganov shared insider information.

The reason for the switch to a lower environmental class has to do with the impossibility of import substitution of important components, and especially the lambda probe. To quickly solve this problem, you can remove the sensor from the exhaust system and build cars according to the Euro-2 standard.

But in this way, the Russian plant goes back 16 years, back to the technological level of 2006-2008.

The expert believes that the main problem of returning to Russian suppliers is not technical substitution, but legal registration. Technical regulations are no longer changed, so cars have to be produced under current vehicle type approval (OTTS).

Revolution is not for Russia

At the beginning of 2021, Groupe Renault announced the Renault program with the increased integration of AvtoVAZ into the concern and the creation of a new Dacia-Lada division. As part of the plan, AvtoVAZ was supposed to completely update its product range in the coming years, abandon its platforms and produce new cars on the new modular platform of the CMF-B alliance. By 2025, the release of four new models is planned, including in 2024 a completely new generation Niva and a new compact crossover.

In mid-March, AvtoVAZ announced a new model based on the French CMF-B platform.

Then the head of the company, Nicolas More, visited the pre-production car workshop, where he was presented with the first sample. It was scheduled to be told in 2023. Tsyganov announced that it is already fully ready for production, but a significant part of the components is imported.

Renault and AvtoVAZ did not answer socialbites.ca’s questions about the possibility of splitting the joint business in Russia and continuing to assemble Renault at the facilities of the Russian enterprise.

Renault, owner of AvtoVAZ, announced for the first time that it is examining the issue of its participation in the Russian presence. AvtoVAZ leadership foresaw such a development of the situation and keeps in reserve the “Plan B”, which was rolled back 16 years ago, to the production of cars with Euro-2 class engines, known to the interlocutors of socialbites.ca. How the domestic manufacturer will cope with the crisis and when to disassemble the Lada without imported parts in socialbites.ca material.

Source: Gazeta


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