French carmaker Renault last weekend confirmed that it would begin producing in Russia Dacia X90 new generation cars priced at less than 5,000 euros, in an attempt to expand on new emerging markets, reads a company report quoted by the Financial Times.
Renault will begin production of the new model at the Moscow-based Mosvich car plant by 2005, following an agreement signed with Moscow authorities. The X90 model, aimed at low-income consumers from the emerging markets, will cost less than 5,000 euros (about 4,500 dollars).
"Our goal is to produce a car aimed at people with low revenues, which should be viable and easy to care for," Renault release reads.
On the Russian market, X90 will compete with domestic brands Lada and Zhiguli, which have dominated the basic market segment so far.
The acknowledgement of this move goes to prove that foreign investors are no longer reluctant towards the Russian market. The project follows General Motors' intention to assembly a new off-road utility vehicle together with Avto Vaz, following 100 million-dollar investments.
Renault, the owner of Dacia brand, struck a partnership with Moscow officials in the '90s, but has not started production at the Moscow-based plant yet, though it has invested more than 110 million dollars so far.
Several Western carmakers have attempted to enter the Russian car market lately.
Previously, a joint venture between Fiat and GAZ in Nizhni Novgorod was postponed, while negotiations regarding the assembling of General Motors' Blazer cars in Tatarstan have failed.
Renault will begin assembling the X90 cars in Romania, at the Pitesti-based plant, where it will invest more than 300 million dollars by 2004.
According to Renault officials, X90 will require 350-450 million dollars in investments and, if the model is successful in Eastern Europe and Russia, it will be exported on other emerging markets, as well.
A number of 700,000 Dacia cars will be produced by the end of this decade throughout the world and there will be three production places. One is located in Romania, where 200,000-250,000 cars will be produced, and the second is in Russia. The location of the third plant has not been disclosed yet.
X90 project is only part of the French carmaker plans to increase output from 2.35 million cars to 4 million pieces by 2010.
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