Renault to Help AvtoVAZ Survive

Following the comments of Russian Prime Minister Vladimir Putin who urged Renault to step in and help the ailing automaker AvtoVAZ, the French car manufacturer expressed its support and said it is indeed willing to invest in the Russian company. According to Russian First Deputy Prime Minister Igor Shuvalov cited by Reuters, Renault will provide financial aid to AvtoVAZ but officials involved in the matter refused to provide more information on how much money the French manufacturer will approve.

"The most important thing is that Renault has confirmed strategic interest in the development of Avtovaz," Shuvalov said. "Renault is ready to invest in Avotvaz," he added.

Vladimir Putin also emphasized that Russia will help AvtoVAZ but he didn't mention the amount of the new package for the local manufacturer. Russia has already approved 25 billion rubles ($830 million) earlier this year.

"Our main desire is to remain your partners. I think that all decisions taken by AvtoVAZ are very painful but necessary. You can rely on Renault. We feel socially responsible and that goes for AvtoVAZ's business plan too," he said after a meeting with Renault Senior Vice President Christian Esteve. "We will work out a new model line for AvtoVAZ. For that we need good parts suppliers."

"AvtoVAZ needs restructuring," Putin said on Monday. "We all understand that, if we do nothing, the enterprise will be sick for a long time and then will simply cease to exist. We can't afford this happening."

AvtoVAZ, who is 25 percent owned by Renault, needs 70 billion roubles ($2.33 billion) to cope with the downturn, Russian business daily Kommersant reported this week.