MOSCOW: Continuing strong sales in the Russian car market are encouraging major brands from mature markets to invest in local firms.

Renault and Nissan have gained support from the Russian government for their joint bid for a 51% stake in flagship carmaker, AutoVAZ.

The authorities have signalled that if more than 300,000 cars each year are built in Russia, custom duties on imported parts will be temporarily waived.

Industry forecasts suggest Russian car sales will rise 40% in 2011, to peak at 4 million units by 2015-16.

Renault, which has identified the significantly under-developed Russian car market as a key sales area, already has an interest in AutoVAZ, having invested $1 billion for a 25% stake in 2008.

Bruno Ancelin, who heads up Renault in Russia, explained that the aim was for "negotiations to be concluded by the end of this year ...The next step is to buy another 25% stake".

Earlier this week Ancelin described how the French auto-maker anticipates car sales in Russia to total 2.7 million in 2011.

The Association of European Businesses, which monitors Russian car sales, predicts 2.35 million for the year. 

But according to Ancelin "most car manufacturers have revised their sales forecasts upwards to 2.6 to 2.7 million'".

Plans for Renault and Nissan vehicles to be built at AutoVAZ's 900,000 capacity plant are reportedly well under way. Renault's Moscow plant is currently running at full capacity to meet strong demand.

Two new Ladas are to be launched by AutoVAZ in the spring of 2012, with the first Russian-made Nissan vehicles likely to follow later in the year.

Data sourced from The Moscow Times; additional content by Warc staff