Renault-Nissan Launches Purchasing Venture with AvtoVAZ

The Renault-Nissan alliance has set up a parts procurement venture with Lada maker OAO AvtoVAZ to cut the cost of components used in the vehicles the companies are preparing to jointly produce in Russia.

The alliance say the purchasing operation has been patterned after one Renault and Nissan set up 12 years ago. That organization and AvtoVAZ are 50:50 owners of the new procurement venture.

Renault, Nissan and AvtoVAZ plan to build as many as 1.7 million vehicles per year three years from now at AvtoVAZ's expanded factory in Togliatti. Each of the partners will sell vehicles under its own brand.

Renault and Nissan are scheduled to take control of the Russian company next year. The three carmakers aim to boost their combined share of Russia's auto market to 40% by 2016 from 18% held by Lada in 2012.