The Renault-Nissan Alliance And Avtovaz Strengthen Their Cooperation In Russia

The Renault-Nissan Alliance and AVTOVAZ today announced a strengthening of their cooperation aimed at ensuring the long-term viability and growth of their combined business in Russia.

BOULOGNE-BILLANCOURT, FRANCE – June 14, 2010

Platform sharing
The Alliance and AVTOVAZ will each have access to product platforms and engines developed by the other partner. Each of the three brands – Lada, Renault and Nissan – will develop a clear product cycle plan for the Russian market and, for Lada specifically, for markets outside Russia.

Research and Development
The R&D of AVTOVAZ will be strengthened through deeper synergies and cooperation with the Alliance. Both partners will work to enhance the quality of AVTOVAZ products, to share know-how and development costs, and to enable the Alliance to adapt its products to the Russian market through the expertise of AVTOVAZ and by expanding local sourcing of components.

Purchasing
AVTOVAZ purchasing department and RNPO Russia agree to communalise supplier quality and supplier development teams in Russia and unify them under a single operational management in order to achieve:

rapid improvement of the supplier base quality in Russia for mass production and new projects;

maximum synergy of resources and best practices

internal procedures and methods improvement;

one-voice position towards supplier base.

Following the creation of �AVTOVAZ – Renault – Nissan Quality and Supplier Development� (ARNQSD), work will be accelerated to increase the percentage of locally sourced parts.

ARNQSD is located in Togliatti with a satellite office in Moscow. Around 100 employees from the three companies are working for this new organisation. The director will report to the VP of purchasing at AVTOVAZ and to the director of RNPO Russia.

Logistics
The Alliance will extend its joint logistics organization for Russia to AVTOVAZ, focusing on the quality, reliability and cost of inbound and outbound logistics.

Production and Quality
With three plants in Russia (Togliatti, Moscow and St. Petersburg), the two partners will have a production capacity of 1.3 million units by 2012. The Alliance Production Way will be gradually extended to cover all of the plants, ensuring maximum production flexibility and enable AVTOVAZ to achieve the same level of product quality and production costs as other global plants in the Alliance.

Sales and Marketing
Renault and Lada will work together to build a new pan-Russia network that will support the growth of both brands in new and existing markets. A dedicated project will be set up to harmonise the parts & service strategy between the two partners.