France's major car maker Renault will start producing its new models in Moscow beginning 2005. The agreement to that effect was signed by Moscow Mayor Yury Luzhkov and Renault President Louis Schweitzer in Moscow Wednesday.
The new production line will be built at the Avtoframos joint venture, which was established in 1998. Renault owns 62% of the venture's shares, the other 38% belong to the Moscow government. The factory has thus far been assembling cars of French-made completing parts only.
The new model is being designed in France. It has been code-named X-90, according to Mr Schweitzer. The car will be adapted to Russian conditions and will be a good combination of high quality and a reasonable price of about US$10,000, said the Renault chief executive. The company is going to invest US$250 million to build the production line hoping to recoup the invested funds by as early as 2007. The line's initial capacity will be 60,000 cars a year and will be boosted up to 120,000 in the event of a favourable development.
Mr Luzhkov unveiled the Moscow government's decision to grant privileges to the French car maker and promote the enterprise's profitability. The government will cut the land lease charge and the space rental. Apart from that, the city authorities will build infrastructure free of charge and aid in launching an advertising campaign.
Putin's Annual Address to the Federal Assembly is scheduled for September 30. Kremlin sources say it will become even more historic and globally important than his 2014 speech