(Updates with analyst comment in fourth paragraph.)
Dec. 28 (Bloomberg) -- Renault SA and Japanese affiliate Nissan Motor Co. may sign an agreement to buy control of Russia’s OAO AvtoVAZ in March, AvtoVAZ Chief Executive Officer Igor Komarov said.
“The main issues between shareholders have been solved already,” he said in an e-mailed statement sent by the carmaker’s press office. “The negotiations may be completed in March,” he said.
Renault, which bought 25 percent of Russia’s largest carmaker for $1 billion in 2008, is seeking to use AvtoVAZ’s Soviet-era Lada brand to reduce costs by sharing production and suppliers. Buying control of AvtoVaz would also give Renault an early advantage over other global carmakers in Europe’s most populous country, where vehicle deliveries may surpass those of France this year.
“With an enormous population set to grow even bigger, it’s definitely a good strategy to capture the Russian market before other carmakers enter,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “By entering the market through acquiring the biggest carmaker it will make it easier for Nissan and Renault to be accepted by the local consumers.”
The Renault-Nissan alliance has been in talks with AvtoVAZ shareholders Troika Dialog and state-owned Russian Technologies Corp. to purchase a 25 percent holding, for a total controlling stake of 50 percent plus one share.
Shares of Nissan rose 0.2 percent to 685 yen as of 9:58 a.m. in Tokyo. The benchmark Nikkei 225 was little changed.
Nissan will introduce a Russian-built car based on the no- frills Renault Logan range in 2012, and AvtoVAZ may begin making engines and gearboxes for all three brands the following year, the French carmaker said July 19.
AvtoVAZ accounted for 45 percent of Russia’s 2010 production of 1.21 million vehicles thanks to Lada’s 23.6 percent market share. Renault, Nissan and AvtoVAZ together target 1.6 million Russian deliveries within five years, for a combined 40 percent of the market.
The agreement was reported earlier today in the French daily La Tribune. Officials at Renault and Nissan didn’t immediately return calls from Bloomberg News seeking comment.
--With assistance from Yuliya Fedorinova in Moscow, Alex Webb in Frankfurt and Anna Mukai in Tokyo. Editors: Chad Thomas, Garry Smith
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