AvtoVaz , maker of cheap Lada brand small cars, should be sold for US$1 to Renault, the head of Russia’s largest car importer told a German newspaper on Sunday.
“One should sell the Lada maker for $1 to Renault. A takeover like that would be a blessing. Old factories were sold for one mark in East Germany – why should the factories in Russia cost billions?” Sergey Petrov told Welt am Sonntag, according to Reuters.
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Duma parliament member Petrov founded Rolf Company in 1991, importing cars which compete with those from Lada and that automaker’s French ally Renault.
The company generated revenue of about $4.6bn before the crisis through the import and sale of vehicles under nine different brands including Peugeot partner Mitsubishi.
AvtoVaz, Russia’s largest carmaker, has received over $1bn in state bailout funds to stay afloat. It made 294,737 Lada cars and 43,047 assembly kits last year, down from 920,000 in 2008, according to Reuters.
Petrov reportedly said the possibility of foreign carmakers taking over Russian plants like the massive AvtoVaz site in Togliatti, where a quarter of the 100,000 jobs were cut last year, was not sufficient to bring a reform of the domestic industry.
“If Renault, which holds a blocking minority, were to acquire 100% of AvtoVaz, then it would confront a trade union that is actually state-controlled and could destroy the company. We lack institutions that can ensure the most competitive survives,” he said.
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