GM, Russian AvtoVAZ To Finalize Deal For New Alliance.(Brief Article)

Russia's biggest car maker AvtoVAZ said it hoped to sign final agreements in May on a joint venture with General Motors and the European Bank for Reconstruction and Development (EBRD).

Alexei Nikolayev, AvtoVAZ's president, said the company also planned to form an alliance of local car makers to boost Russia's automobile industry, where AvtoVAZ is the clear leader. GM and the EBRD agreed this year to take part in a $332 million joint venture with AvtoVAZ, where GM and AvtoVAZ would have 41.5 percent each and would contribute $100 million each, while the EBRD would add the remaining $132 million.

"The joint venture is not created yet. The final talks are under way. We hope the final document will be signed in May," Nikolayev told a recent automobile industry conference. Under the joint venture, AvtoVAZ is to build about 75,000 of its new Niva off-road vehicles to be sold in Russia under the GM Chevrolet brand name. Production is due to start in 2002.

Nikolayev confirmed AvtoVAZ's plans to also start production of GM's Astra T-3000 model in coming years. Plans for production of the Astra in Russia were earlier dropped because its target price of about $12,000 was considered too expensive for the local market. GM said in March the Astras would be launched in Russia in 2004-2005.

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