Renault plans to maintain its 25% stake in AvtoVAZ and expects Russia’s scrappage incentive to boost sales in the country more than it had expected.
AvtoVAZ reported today that May sales jumped 60% year-on-year to 46,000.
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Separately Renault’s Christian Esteve, the leader of the company’s Eurasia region management committee, said the Russian sales incentive programme is working very well and that overall car sales in the country could be more than a previous expectation of 1.6m units.
He also underscored Renault’s commitment to “the transformation and the modernization of AvtoVAZ.”
The Russian state, which also owns 25% of AvtoVAZ, has also provided the company, which has struggled as vehicles sales in the country plummeted last year, with financial aid.
Russia’s prime minister Vladimir Putin is also eager to support domestic carmakers as Russia emerges from its first recession since the 1990s. Today he met with steel producers to iron out a compromise following a series of complaints by industrial producers over rising prices.
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By GlobalDataUnder a new agreement, steelmakers will raise prices by 22% from June until the end-2010, well below previously planned increases of up to 30%.
Nonetheless, AvtoVAZ president Igor Komarov noted that higher steel prices would cost his company at least RUR1.5bn (US$48.5m) this year.
