MOSCOW (Bloomberg) -- Renault and Japanese affiliate Nissan Motor Co. may sign an agreement to buy control of Russia's largest automaker, AvtoVAZ, in March, AvtoVAZ CEO Igor Komarov said.
"The main issues between shareholders have been solved already," he said in a statement today. "The negotiations may be completed in March."
Renault bought 25 percent of AvtoVAZ for $1 billion in 2008 and is seeking to use the Russian company's Soviet-era Lada brand to reduce costs by sharing production and suppliers.
Buying control of AvtoVaz would also give Renault an 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," he said.
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.
Market share
Nissan will introduce a Russian-built car based on the no-frills 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 seeking comment.
