AvtoVAZ head Boris Aleshin is ready to keep the Avtotor and Izhavto lines running as well as his own.
Photo: Pavel Smertin
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AvtoVAZ May Make Hummers, Caddies, Yuejin
AvtoVAZ and its shareholder Renault are considering the acquisition of the Kaliningrad ZAO Avtotor, which assembles Chevrolet, Chery, Kia, Yuejin, BMW, Cadillac and Hummer models. Renault representatives and AvtoVAZ vice president Maxim Nagaitsev visited the Avtotor plant two weeks ago, but no official offer has been made yet. AvtoVAZ and Renault are also considering the acquisition of Izhavto, assembler of the Korean Kia, from SOK Group, which a delegation also visited two weeks ago.
Now AvtoVAZ specialists are preparing to go to Izhevsk for due diligence. A source at AvtoVAZ explained that the buying spree was possible because plans there “are somewhat broader than officially stated.” The Izhavto plant has a capacity of 220,000 vehicles per year for welding and painting. SOK sources say unofficially that the plant is worth $500 million.
In February of this year, when the French concern Renault acquired a blocking package in AvtoVAZ, the new partners stated that they would produce 1.5 million cars in Togliatti by 2015. AvtoVAZ, which is controlled by Rosoboronexport, has taken an interest in Avtotor just as it is experiencing production problems. It produced 42,000 vehicles in 2007 and planned to build a plant with a capacity of 250,000 vehicles for $200 million. Those plans were cancelled, however, because of “the strengthening of the ruble.”
Chevrolet, Chery, Kia, Yuejin, BMW, Cadillac and Hummer are assembled at Avtotor. The plant produced 100,000 vehicles last year, 42,000 of which were Chinese Chery. The Chinese paid an amount per vehicle set in dollars but paid in the equivalent number of rubles. Therefore, the plant's income constantly fell as the dollar lost value against the ruble. Observers estimate the Avtotor plant to be worth $150-200 million.
www.kommersant.com
All the Article in Russian as of Apr. 01, 2008
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