Renault-Nissan and AVTOVAZ unite purchase

Renault-Nissan and AVTOVAZ unite purchase

Vedomosti – AVTOVAZ has approved the sale of 50% shares of the company under the name of Joint Purchasing Organisation (SZO) to Renault-Nissan. 49% of the shares will be held by Renault-Nissan Purchasing Organisation and 1% by Renault.

According to Vedomosti, SZO has become the first stage in uniting the purchasing operations of components and equipments to be used in automobiles manufactured in Russia. This way, the partners expect to lower the purchase prices by increasing purchase amounts. According to the former procedure, SZO used to make negotiations with the suppliers, however the purchase agreements were being made by the car manufacturers themselves. The news sources inform that AVTOVAZ will also have a share in the purchasing company, named Avtovaz Renault Nissan Purchasing Organisation (ARNPO). The new organisation is expected to commence operations as of early 2015.

According to AVTOVAZ sources, the company spent 90 billion rubles on purchases from Russia based suppliers in 2014. As analysed by VTB Kapital, the amount spent by the company on parts and components imports is over 100 billion rubles.