Renault Doubles Capacity at Russian Auto Plant

Annual capacity has been doubled to 160,000 vehicles per year

Renault on March 1 inaugurated its upgraded Avtoframos plant where annual capacity has been doubled to 160,000 vehicles per year in a key market the company believes has bottomed out.

Renault chief executive Carlos Ghosn and Moscow city mayor Yury Luzhkov officially opened the facilities at the plant which the French company acquired when it bought Avtoframos.

Ghosn said Renault has responded to the need for "robust and affordable cars in Russia. "We think that the market in Russia has bottomed out at the 1.4 million cars reached in 2009.... Now we should see a recovery," he added.

The upgrade cost 150 million euros (US$204 million), on top of the initial plant investment of 230 million euros.

The plant will add the Sandero model to the Logan it was already making. "Moscovites really like the Sandero, it is a very modern and comfortable car," Luzhkov said.

Renault said that Russia remains a "strategic market" for the company given its enormous potential and despite the near 50% plunge in output last year as the global financial crisis slashed demand.

"There are 230 vehicles for every 1,000 inhabitants in Russia while in Western Europe it is 600 vehicles per 1,000 inhabitants," it noted.

Renault is also present in Russia via its 25% stake in Avtovaz, the country's largest automaker whose future was very much in doubt last year as the market tumbled.

Copyright Agence France-Presse, 2010

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