AvtoVAZ Should be Sold to Renault for $1

Things are not going to well for AvtoVAZ, the Russian car manufacturer which produces the cheap Lada brand, as production seriously dropped in 2009. In an interview for a German newspaper, the head of Russia’s largest car importer said that AvtoVAZ should be sold to Renault for $1.

"One should sell the Lada maker for $1 to Renault. A takeover like that would be a blessing. Old factories were sold for one mark in East Germany - why should the factories in Russia cost billions?" Sergey Petrov told Welt am Sonntag, according to Reuters.

Petrov is the founder of the Rolf Company, a car importer which generated revenues of $4.6 billions before the recession, as it sold nine different car brands throughout Russia. AvtoVAZ is Russia’s largest automaker and received $1 billion from the government just to be able to stay afloat. Last year, AvtoVAZ only managed to build 294,737 Ladas, down from 920,000 back in 2008, says Reuters.

Sergey Petrov seems to think that carmakers taking over Russian plants like the AvtoVAZ plant in Togliatti, where 25,000 jobs were lost, are not enough to bring the economy back on the right track.

"If Renault, which holds a blocking minority, were to acquire 100% of AvtoVAZ, then it would confront a trade union that is actually state-controlled and could destroy the company. We lack institutions that can ensure the most competitive survives," he said.