The Malaysian Insider :: Breaking Views
The Malaysian Insider :: Breaking Views |
| Renault-Nissan seals Lada deal in quest for Russian growth Posted: 12 Dec 2012 08:36 AM PST MOSCOW, Dec 12 — Renault-Nissan has finalised a long-awaited deal to take control of Lada-maker AvtoVAZ as it looks to snatch market share from rivals in Russia by taking the boxy cars upmarket for a rising middle class. Carlos Ghosn, leader of the Franco-Japanese alliance, who was in Moscow to sign the agreement, said the deal deepened a four-year partnership it had had with AvtoVAZ, hoping to tap demand for new cars from Russians with growing incomes and rising aspirations.
AvtoVAZ only survived a 2009 slump with the help of a state bailout and its clunky saloons, with a reputation for breaking down, are often the butt of jokes. "Without any doubt, the Lada brand will be in the short term and the long term the largest brand in Russia for the alliance," Ghosn told Reuters. "We are here to strengthen the brand and give it everything it needs." Ghosn said he wanted Lada to be competitive at the bottom end of the market but also wanted to move the marque into higher price brackets. Two new Lada models, the Largus and Granta, had already attracted high demand and the company was still trying to deliver six months' worth of orders, the group said. Ghosn expects the newly-created venture to capture 40 per cent of Russia's market by 2016, up from 30 per cent, as Renault-Nissan contributes technology and product knowledge to Lada while benefiting from AvtoVAZ's manufacturing base. "Russia is poised to become the largest auto market in Europe by 2015," Ghosn told a news conference today. The group will be competing against several foreign makers that have been investing in Russia, such as General Motors, Ford, Fiat and Volkswagen. Sales rise Russia's car market has been growing rapidly on a rise in disposable incomes and an expansion of the country's middle class, to between 15 and 30 million from just one million in 1999, according to recent research by Sberbank. Car sales in Russia grew 40 per cent last year to more than 2.6 million vehicles, recovering most of the ground lost after halving in the post credit-crunch slump of 2009. Growth has been flattening out, but overall sales for the year look set to reach around 2.9 million and Ghosn expects yearly sales to reach four million at some point in the 2020s. Analyst Vladimir Bespalov at VTB Capital doubted the new alliance would achieve a market share of 40 per cent in the face of increasing competition, but saw around 35 per cent as possible. Under the deal, first announced in May, Renault-Nissan will invest 23 billion roubles (RM2.3 billion) to take control of AvtoVAZ via a 67.13 per cent stake in a joint venture with state-owned holding group Russian Technologies. The venture, to be completed by mid-2014, will own 74.5 per cent of AvtoVAZ. Russian Technologies will own 32.87 per cent of the joint venture. AvtoVAZ's debt to Russian Technologies will also be restructured under the agreement. The Russian manufacturer will sell non-core assets to pay 8 billion roubles in loans. A remaining 46 billion interest-free debt is being extended and will be repaid by 2032. As part of the agreement, Renault-Nissan will have eight seats on a board expanded to 15 members from 12. — Reuters |
| Hong Kong leader survives no confidence vote over building work Posted: 12 Dec 2012 08:11 AM PST  Pro-democracy lawmakers chant slogans against Chief Executive Leung outside the Legislative Council December 10, 2012. — Reuters pics Beijing-backed Leung was criticised by pro-democracy lawmakers in a four-hour debate for failing to give a clear account of building work in the hilltop mansion — something he in turn had seized upon to oust his rival Henry Tang, when both ran campaigns for Hong Kong's chief executive post this year. In space-starved Hong Kong, embellishments to homes are common to maximise living space, but similar violations have ensnared several prominent officials over the past year. "He did not come clean, he did not tell us the whole truth and he was deliberately hiding things from us ... he has no integrity," said pro-democracy opposition lawmaker Dennis Kwok who tabled the no-confidence motion.  Protesters with a paper cutout of Chief Executive Leung outside the Legislative Council. The fraught vote caps a difficult half year for Leung, who has wrestled with issues including high property prices, perceived interference from China over a national education curriculum, and grassroots resentment caused by a growing tide of Chinese visitors and pregnant mainland mothers cramming local maternity wards to gain local citizenship. While there is no sign that Leung's support from Beijing's leaders has suffered as a result of the scandal, a planned "anti-Leung" mass protest on January 1 could heighten tension. Hong Kong, a former British colony that returned to Chinese rule in 1997, remains a stable financial centre, though its political arena has been stormy at times as the city and its opposition pro-democracy forces push for full democracy in 2017. A mass half-million strong protest in 2003 against the policies of unpopular former leader Tung Chee-hwa ultimately forced him from office mid-term. Leung had initially been considered an underdog in the March poll against Tang. But a series of scandals, including one over illegal structures discovered in Tang's home, proved a tipping point that ruined Tang's campaign. Leung has apologised for "negligence" over the matter, denying he'd covered anything up while blaming a "memory lapse" for much of the confusion. Leung has faced further criticism over confidential US diplomatic cables published by WikiLeaks that showed his adviser, Shiu Sin-por, told US diplomats that Beijing was not willing to cede complete control over the city's first direct election for its leader in 2017. Shiu said Chinese leaders would ensure that even with universal suffrage, individuals deemed unacceptable to Beijing would never get nominated or elected as Hong Kong's leader. — Reuters |
Reviving the Lada brand — still Russia's market leader — is a top priority for Ghosn, who says it is expected to lead the group's growth plans.| You are subscribed to email updates from The Malaysian Insider :: ALL To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
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