MOSCOW, April 22 Renault has frozen plans to
produce vans with Russian truck maker ZIL due to a
weakening of the rouble, a spokeswoman for the French carmaker
said on Tuesday.
Last year ZIL signed a preliminary agreement to assemble
Fiat and Renault vans at a Moscow factory, a
source close to ZIL said at the time.
"Renault was in negotiations with ZIL about production of
LCV (light commercial vehicle) cars," a Renault spokeswoman said
on Tuesday via email. "Due to the weakening of the (rouble)
Renault (has) frozen this project" and is looking at trying to
find a solution to making the project profitable, she added.
Russia's declining rouble has been a double-edged sword for
automakers, which benefit if they are highly localised - meaning
they source the majority of the parts and assemble the car in
Russia. The falling rouble makes these cars more competitive
against more expensive imports.
However, the damage to consumer confidence from the
political instability that has caused a plunge in the currency
is expected to hurt all automakers.
The rouble has fallen nearly 8 percent so far
this year against the dollar owing to a stand-off between Moscow
and Kiev and Russia's decision to annexe Crimea in March. The
currency has fallen 18 percent since the start of 2013.
Renault is studying opportunities to produce LCVs locally in
Russia, the spokeswoman said, and ZIL's plant remains one of the
possible manufacturing sites though no investments have been
made as yet.
Russia's Vedomosti newspaper earlier reported that both
Renault and Fiat may drop the plans to assemble vans at ZIL.
The factory planned to assemble 50,000 vehicles per year,
including 25,000 Renault Master vans and 25,000 Fiat Ducato
vans, starting from early 2014, the source close to ZIL said
Fiat declined to comment on Tuesday. ZIL did not immediately
respond to a request for comment.
(Reporting by Megan Davies; Editing by Sophie Walker)