Renault will spend US$150m at its Avtoframos plant in Moscow to expand capacity from 80,000 Dacia Logans a year now to 160,000 by mid-2009.

Avtoframos is a CKD kit assembly  and Renault has proposed to develop its Russina operations further by forming a partnership with AvtoVAZ. The French automaker has proposed building four Lada-branded models for AvtoVAZ and another four for its own Renault brand, including the Logan (which is sold in emerging markets under both Dacia and Renault brands).

Renault was thought to want a formal joint venture (JV), including a 25% stake in AvtoVAZ, but this was a stumbling block and recent reports suggest Renault is now prepared to look at a less formal alliance based around assembling the Logan and making engines.

AvtoVAZ plans to develop and manufacture 12 new models in the next few years. Despite its need for investment and western expertise, the one-time assembler of Fiat's 124 sedan is determined to remain a Russian-owned national champion.