Is there a more intriguing place than Russia? Putin and communism and fascism and oligarchs and vodka! Siberia and the gulag and the Kremlin and corruption!
Plus, the country’s automaker with the most capacity produces limo taxis like this (or used to produce, but still):
That’s a Lada limousine (PUN!). And Ladas are the flagship brand for OAO AvtoVAZ. What the heck is OAO AvtoVAZ? According to the Wall Street Journal, AvtoVAZ is “the struggling Russian maker of outdated and unreliable cars.”
Guess what? French-based Renault SA and Japan-based Nissan Motor Company are spending $750 million to acquire a controlling stake in the Russian car company capable of producing over a million cars a year. That’s a Lada cars!
Russia is expected to overtake Germany as Europe’s leading auto market, maybe as early as 2014; this is the driving force behind the investment (not the Lada mystique). The details of the Renault-Nissan OAO AvtoVAZ transaction are confusing, and if the Wall Street Journal can’t make sense of it, I’m not going to try. So just know that the investment’s completion is also occurring in 2014, culminating in the Renault-Nissan alliance controlling over three quarters of AvtoVAZ’s board.
Renault will have the largest production capacity in all of Russia following the acquisition, to which the French and Japanese will toast and exclaim, “Molotov”, hug the Russians, and then collectively drive to the lavish after-party in a Lada limousine.
For the loose analogous reverse story of a Russian billionaire purchasing a moribund American company, I point you to the Wikipedia page of the soon-to-be Brooklyn Nets. Click here to read about the Nets and Mikhail Prokhorov and Jay-Z.
Click here if you need a new car, even if it’s not a Lada.