Renault's Ghosn Takes On a Russian Relic

The automaker likes to work with partners. It bought into AvtoVAZ to use its Soviet-era factory to make cheap cars based on the super-successful Logan
(L to R) President of Avtovaz Boris Aleshin, Renault CEO Carlos Ghosn, and Sergei Chemezov, head of Russia's state-owned Rostekhnologi shake hands in Moscow on Feb. 29, 2008 after French carmaker Renault signed a deal to buy a stake in Avtovaz ALEXANDER NEMENOV/AFP/Getty Images

The AvtoVAZ (AVAZ.RTS) car factory in the central Russian city of Togliatti seems frozen in time. In a decrepit, mile-long building, boxy Lada sedans are turned out by 40-year-old production equipment—installed when Italy helped the Soviet Union build a carbon copy of a Fiat plant. On an icy February morning, one assembly line has shut down and others are operating fitfully because a snowstorm has disrupted shipments of needed components. Dozens of partially-built cars sit in a corner of the vast plant. "We'll finish them as soon as we get the parts," says Valery Shendyapin, a cheerful supervisor in a bright blue jacket.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.