Avtovaz will offer Renault a large minority stake in the
struggling company, the Interfax news agency quoted an official with
the state concern that controls Avtovaz as saying.
OAO Avtovaz has been considering bids from foreign companies
including General Motors Corp. (NYSE:GM) and Fiat SpA.
Avtovaz President Sergei Chemezov will present the project to
Renault Chief Executive Carlos Ghosn on Saturday in the Russian city
of Togliatti, Renault spokeswoman Rochelle Chimenes said. She
declined to give further details.
Avtovaz, maker of the boxy Lada sedans that were a staple among
the relatively small number of car owners during the Soviet era, has
found it difficult to compete with higher-quality imports.
Losing ground to foreign rivals in a domestic market growing fast
amid Russia's oil-fueled economic boom, Avtovaz has been seeking a
major foreign partner.
GM has been operating a joint venture with Avtovaz at a plant in
the Volga River city of Togliatti since 2001. But the companies'
relationship has been rocky since the Russian government effectively
took control of Avtovaz in late 2005.
Last year, the joint venture temporarily halted production after
a parts contract came under review. The two sides also were unable
to agree on the joint construction of an engine plant in the central
city of Samara, with Avtovaz saying it feared it wouldn't be able to
recoup its investment.
GM has one other plant in Russia, a facility in Kaliningrad
operated by Russian automaker Avtotor. GM also is building a third
plant near St. Petersburg that is expected to begin production in