As expected, Renault has today announced plans to accelerate its industrial strategy for Russia. Renault has decided to invest some 230 million euros in the local production and marketing of its future X90 vehicle, starting in mid-2005.
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The production line – to be set up in Moscow at the plant belonging to its Avtoframos joint venture with the City of Moscow (the JV is owned 62% by Renault and 38% by the City of Moscow) – will have a capacity of 60,000 vehicles a year.
Renault says that ‘positive developments in the economic, regulatory and political environment’ have led to the decision to proceed.
Renault says that with almost 1.5 million units sold in 2002, including 900,000 produced in Russia, the Russian automobile market is growing an average 10% per year.
With over 80% of vehicles sold in Russia priced at under $10,000, Renault has decided to position itself at what it describes as the the core of the market – modern and economical vehicles.
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By GlobalDataThe X90 vehicle, which is currently being developed by Renault’s vehicle and powertrain engineering teams in France, will use a platform derived from the Renault-Nissan Alliance B platform (also used for the Nissan Micra and Renault Clio).
Renault describes the upcoming X90 model as a ‘modern and attractive, very spacious family saloon that will be designed for reliability and simplicity for use in countries where infrastructures still vary in quality and climatic conditions are often severe’.
The X90 will be the first model in a wider range and has been ‘designed for countries with a strong demand for economical cars built to top international standards’. Further, the company maintains that it is set to play a key role in the Renault group’s growth strategy.
The X90 will first be produced at the end of 2004 at the Dacia plant in Pitesti, Romania. It will then go into production at a second assembly site in Russia.
The 230 million euro investment by Renault will cover the installation of production lines in the Avtoframos plant in Moscow, and the development of the sales network and support functions. Equipped with sheet metal, paint and final assembly shops, the Moscow site will be able to employ up to 2,000 people when operating at full capacity. The plant will gradually draw on local subcontracting possibilities.
Initial production capacity is 60,000 vehicles a year, a rate that Renault says should be reached after two to three years of operation.
The Avtoframos plant currently carries out final assembly of Clio Symbol at a rate of some ten vehicles per day – 3,912 units of this model were sold in 2002. The final assembly of Clio Symbol will continue until theX90 comes onstream.
The Renault range is marketed in Russia through a network of 61 points of sale, with almost 8,400 vehicles sold in 2002. In the medium term Renault is looking for annual sales volumes of some 100,000 vehicles (comprising both imports and locally assembled models).
