For the first time in around 40 years, the best selling car in Russia is not a Lada, as supplier troubles mean the brand's Granta subcompact was overtaken by the Kia Rio in November.
It's not every day that a new Niva comes along. Lada has, after all, been producing its version since 1977, and through a joint venture between AvtoVaz and General Motors, a Chevy-badged version since 1998. Sure, there's been talk of creating a new one. Bertone even gave it a facelift a few years ago. But what we have here could be the biggest step forward in the history of one of the oldest models still on the road.
When Nissan revived the Datsun brand name, it essentially hit the "undo" button on the rebranding it undertook decades ago. But this time, the Datsun name is being used solely as a budget brand for developing markets. The reborn marque launched in India this past July with its Go hatchback, returned in September with the Go+ minivan and revealed the Redi-Go concept just last month. And now it's back again with the new On-Do sedan.
Renault-Nissan aims to increase its stake in Avtovaz, giving the alliance majority control over Russia's largest automaker. The deal will likely see Renault and Nissan vehicles manufactured beside Lada models in the near future. Avtovaz recently finished a new production facility in Togliatti where the three brands plan to produce up to 1.6 million units per year. That move would make the Togliatti plant one of the largest automotive manufacturing facilities in the world. The companies expect th
"It's time to say goodbye," said AvtoVAZ spokesman Igor Burenkov to Russia's RIA Novosti about the end of Lada 2107 production, which happened this week. The Lada 2107, also called the Lada Riva, has been plying Russian roads since before Ronald Reagan started redesigning walls. It's one of the cars you're most likely to see in grainy film and video clips from the days before Glastnost.
In spite of contraction in Europe and a series of natural disasters in Japan and Thailand that crippled supply, Renault-Nissan – with a tiny bit of help from Russian partner Avotvaz – sold 8.03 million cars in 2011. The record year outdid 2010 sales by 10 percent, with Nissan's sales growing 14% and Renault improving by 4.6 percent.
It's not every day that Lada comes out with a new car. In fact, the Samara – which the model you see here is set to replace – has been on the market pretty much unchanged since 1997. (And that's not even their oldest model: the Niva 4x4 has been out there since 1977.) So the launch of the new Granta is a bit of an occasion for the Russian automaker and its parent company, AvtoVaz.
During the first quarter of 2010, Russian automaker Avtovaz lost 2.6 billion rubles ($85M U.S.). In the second quarter it made almost a third of that back when it posted a net profit of one billion rubles ($32.7M U.S). The spike came courtesy of Russia's cash-for-clunkers program, which more than doubled the firm's sales over Q1 numbers to 149,100 cars.
Renault has found a way to appease Russian Prime Minister Vladimir Putin that didn't involve writing a check for $850 million. The French company took a 25% stake in Russian carmaker Avtovaz, and when Avtovaz started having a hard time of it earlier this year Renault looked content to see how things turned out. Putin wasn't: he told Carlos Ghosn to inject cash into Avtovaz, or Putin would dilute Renault's stake with a share sale.
It seemed like a good idea at the time, but with hindsight being 20-20, how many failed ventures can be summed up by that same excuse? Just last year, Russia was looking to foreign investors as one of the most promising emerging markets in the world. Renault got locked into a bidding war with Fiat and General Motors for a large stake in Autovaz, Russia's largest automaker, known to consumers for producing Lada.
Russia has long been included under the "emerging markets" umbrella that carmakers have been saying would lead to future industry growth. The economic fallout put an end to those predictions, with Russia suffering just as badly – and if you include the oil sector, some would say even worse – as any other economy. But even though sales are down, Frost & Sullivan predicts that Russia could rebound to be the world's 3rd largest auto market by 2012, behind the U.S. and China.
Relentless deal maker Carlos Ghosn has never stopped looking for any partnership that would give Renault a plum position in a profitable market. Already close to a Nissan deal with Chrysler working on Renault and Nissan deals in the Middle East, his latest paramour is in Russia. Ghosn has secured himself and four Renault managers seats on the board of AvtoVaz -- the company which, as you're all aware, is more popularly known for the name of its signature vehicle: the Lada.
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