Bloomberg News

Renault Studying Joint Projects With Russia's AvtoVAZ

May 31, 2006

Renault SA (RNO), France's second-largest carmaker, is studying opportunities for cooperation with Russian carmaker AvtoVAZ as the company expands into developing markets.

Managers are on a trip to Russia and are looking at a variety of ways the two companies might cooperate, said a Renault spokeswoman, who declined to provide her name. Earlier Vedomosti reported that Renault wants to buy 20 percent of AvtoVAZ, citing sources close to the Russian company's board of directors.

Renault buying a stake in AvtoVAZ is not under discussion, Ivan Skrylnik, a spokesman for AvtoVAZ Chairman Vladimir Artyakov, said in a telephone interview from Moscow.

AvtoVAZ has a joint venture with U.S. automaker General Motors Corp., though relations between the two companies have been strained in recent months. Renault builds the Dacia Logan, a low- priced car for developing markets, in Romania.

Skrylnik also said that various types of cooperation are under discussion with the French carmaker.

``We are studying their experience in technology and logistics, making chassis,'' he said.

AvtoVAZ shares rose 6.7 percent to 1,241.9 rubles in Moscow. Shares of Renault rose as much as 1.95 euros, or 2.2 percent, to 89.70 euros, and were up 1.9 percent at 4:55 p.m. in Paris.

To contact the reporter on this story: Jeremy van Loon in Berlin at jvanloonbloomberg.net.

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.


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