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Renault-Nissan & AvtoVAZ: joint procurement in Russia

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The Renault-Nissan Alliance and AVTOVAZ announce the creation of a common structure in charge of overseeing the procurement of Renault, Nissan and AVTOVAZ Russia. This structure provides a perimeter defined industrial equipment, the mechanics (engines and gearboxes) and vehicles from common platforms.

• A new organization, a joint subsidiary of the Renault-Nissan Alliance and AVTOVAZ, to oversee, on a defined perimeter, purchases of three partners in Russia

• A substantial source of savings realized through increased purchasing volumes and obtain better prices from suppliers.

• An initiative to strengthen the quality and competitiveness of LADA, iconic brand AVTOVAZ

Society "Common Purchasing Organization LLC" (CPO) will be owned equally by AVTOVAZ and Renault-Nissan Purchasing Organization (RNPO) which it will adopt the model. Created in 2001 RNPO is the largest common structure of the Renault-Nissan Alliance and the leading contributor of news generated synergies thanks to a policy of cost reduction and limitation of expenses. RNPO covers 100% of purchases of Renault and Nissan in the world.

Like RNPO, CPO should allow the three partners to realize significant savings by increasing the volume of purchases and getting better prices from suppliers. CPO will use the methods and procedures that have contributed to the effectiveness of RNPO, allowing it to generate 851 million euros in synergies for Renault-Nissan in 2012, about one third of total synergies from the Alliance.

CPO is the guarantor of a common position for the Renault-Nissan Alliance and AVTOVAZ vis-a-vis suppliers in matters of quality, cost and supply delays. It will develop relationships with providers to broaden its fabric suppliers in Russia and increase the local supply of its parts.

Furthermore, CPO attract international groups in its supplier base, which should participate in the improvement of the quality and technology used by automotive suppliers in Russia.

CPO is the creation of a new stage of strategic partnership between the Renault-Nissan Alliance and AVTOVAZ in 2008 when Renault is between a 25% stake in leading Russian carmaker. It should encourage a more close cooperation between AvtoVAZ and Renault-Nissan by an improvement in the competitiveness of the LADA brand and future vehicles of the three partners.

Daniel Perry was appointed Director General of the new structure and will be based at the headquarters of the new company in the Russian city of Togliatti in Samara Oblast. He will report a governance committee consists of Christian Vandenhende, President and ceo of RNPO, Yasuhiro Yamauchi, Delegate Director General RNPO and Damir Kashapov, Vice-President Purchasing for AVTOVAZ.

The creation of the common structure of purchases Renault-Nissan and AVTOVAZ has received the agreement of the Russian Federal Agency for fight against monopolies.

About the Renault-Nissan Alliance

The Renault-Nissan Alliance is a strategic partnership established between the Renault, with headquarters based in Boulogne-Billancourt in France, and Nissan, based in Yokohama, Japan, which together sell 10% of cars sold in the world. Strategic partners since 1999, Renault and Nissan sold last year 8.1 million cars in nearly 200 countries. The Alliance is also engaged in strategic collaborations with various manufacturers such as Daimler German, Chinese Dong Feng or Indian Ashok Leyland.

About Avtovaz

AVTOVAZ producer cars Lada is the largest automaker in Russia. The company operates one of the world's biggest factories, has Togliatti and a unit situated in Izhevsk. AVTOVAZ has given aims to approach the bar of the 1.4 million vehicles (LADA brand, Renault and Nissan) out of its assembly lines by 2015.

Source: Renault AvtoVAZ Communications

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