Late Friday, Russian automaker AvtoVaz selected Renault – not General Motors and not Fiat – to be its new minority owning partner. 

GM had earlier said its bid for a stake in the Russian automaker, which produces the Lada, was “competitive” with those of other bidders, but had declined to specify the amount it was bidding.
 
Some experts believe that Russia will become the largest auto market in Europe, possibly as soon as 2011, with a 3.3 million vehicle per year market. But AvtoVaz has lagged – think of it as the Studebaker of Russia – and the Lada is vulnerable to competition from newer vehicles. 

So, AvtoVaz wanted an injection of capital and technology from a partner, in exchange for entre into the growing market.
 
As a practical matter, this means that Renault and its CEO, Carlos Ghosn, is getting in bed with Russian premier Vladimir Putin andhis crowd of associated thugs that are running Russia. AvtoVaz is controlled by a holding company owned by the Russian government. 
 
Foreign investors who have committed funds to Russia in the past have found themselves forced out when it suited the government to do so, despite having invested heavily in the facilities located in the country. Russia’s government has been implicated in assassinations in foreign countries, as well as the imprisonment of opposition figures within Russia.
 
General Motors should consider itself lucky.

Source: Automotive News

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