State-owned stakes in the Russian auto firm AvtoVAZ, truck builder Kamaz and engine firm Avtodizel are being merged to create the first national auto conglomerate of the Carpocalypse. AvtoVAZ chairman Boris Alyoshin is stepping down, and will be replaced when the merger is complete. A new firm, created out of Russian Technologies, has been formed as a holding company for the government stakes which amount to 37.8% of Kamaz, 25% of AvotVAZ and 30% of Avtodizel. Renault owns another 25 percent stake in AvtoVAZ. But underlying weakness in the merging firms and the complication of government-owned conglomerate governance raise concerns for the latter-day Leyland. “It is hard to see any synergy from the unification of the passenger car producer and the heavy truck maker,” Alfa Bank analyst Georgy Ivanin tells AFP. “The decision making process in both companies may slow as the management structure gets more complicated.” Not to mention the “been there done that” factor.
This is nothing like British Leyland, which actually had some decent cars when it started up. Russian Leland has, what, a last generation Sebring as a flagship? Oy. Starting out bad and tapering off from there.
Its a car company, a truck company (if I’m correct, with the world’s biggest factory, raw ore and unrefined oil go in one side and finished trucks come out the other) and a maker of commerical diesel engines. Synergies are elimination of administrative staff as well as increased purchasing power.
Never know…
Well it looks like the merger standardizes the Russian government’s stake at about 30% while diluting Renault’s stake to single digits. With the truck company’s Rouge-like ore-to-trucks operation, the car division can get some lower cost raw materials. No need to worry about a huge bureaucracy, Russia has purges down pat.