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RUSSIA: Renault, Nissan and Avtovaz to merge purchasing in Russia

By Graeme Roberts | 15 December 2014

Venkatram Mamillapalle, vice president of purchasing at Avtovaz. In January 2015 he will become general director of the newly combined purchasing organisation (ARNPO)

Venkatram Mamillapalle, vice president of purchasing at Avtovaz. In January 2015 he will become general director of the newly combined purchasing organisation (ARNPO)

Renault, Nissan Motor and Avtovaz will merge their purchasing activities in Russia, effective January 2015.

The new Avtovaz-Renault-Nissan Purchasing Organisation, or ARNPO, will manage the purchasing activities of all three partners in Russia under the international standards of the Renault-Nissan Purchasing Organisation (RNPO). Established in 2001, RNPO handles all purchasing activities of Renault and Nissan worldwide and is the biggest contributor to Renault-Nissan synergies, the alliance said in a statement.

ARNPO will take over the activities of Common Purchasing Organisation (CPO), an equally-owned company established by RNPO and Avtovaz in September 2013 to manage purchases for the three companies’ joint projects in Russia. It recently became an affiliate of RNPO following RNPO’s purchase of a 49% stake in CPO from Avtovaz. RNPO’s stake in CPO is now 99%. RNPO’s share increase in CPO has been approved by Russia’s federal anti-monopoly Service. In January, CPO will change its name to Avtovaz-Renault-Nissan Purchasing Organisation (ARNPO) and integrate the individual purchasing departments of the three partners in Russia as well.

The establishment of ARNPO marks the latest milestone in the deepening partnership among the three companies, which began in 2008 when Renault took a 25% stake in Russia’s largest automaker. Today, the Renault-Nissan Alliance owns a 67.13% stake in the joint venture which controls Avtovaz. Together they produce vehicles at the Togliatti plant, one of the world’s largest auto plants, under four brands: LADA, Renault, Nissan and Datsun.

Thanks to the combined purchasing volume of Renault, Nissan and Avtovaz, ARNPO will become the largest buyer in Russia’s auto industry and will help integrate Avtovaz further into the global industry. 

ARNPO’s main responsibilities will include:

ARNPO will be structured as a limited liability company headquartered in Togliatti with branches in Moscow, Izhevsk and St. Petersburg. Venkatram Mamillapalle, purchasing vice president of Avtovaz, will be appointed general director of ARNPO in January 2015. The new structure will integrate employees from Renault, Nissan and Avtovaz in Russia.

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