Source Pravda.Ru

Renault to sign deal expanding Moscow plant, citing soaring sales of Logan model

French car maker Renault SA will sign an agreement Friday with the Moscow government to expand production at its plant in the capital, citing soaring demand for its budget Logan brand.

"Due to the success of the Renault Logan project in Russia, Renault and the government of Moscow plan to increase production capacity at the Avtoframos factory," Renault said in statement released ahead of an evening signing ceremony.

The company previously had said it planned to expand production capacity from 60,000 to 80,000 vehicles, however, the deal to be announced Friday appeared to go beyond that, involving "territorial expansion," spokeswoman Olga Sergeyeva said.

Renault sold 72,484 cars in Russia last year, up 148 percent from 2005 two-thirds of which were Logans. The company has said it aims to sell more than 100,000 cars in 2009.

Foreign car makers are rushing to set up in Russia: high oil prices have helped spur disposable incomes and foster an emerging middle class and car loans are now widely available, reports AP.

Last year, 1 million new foreign cars, including those assembled locally and imported, were sold in Russia an increase of 80 percent, according to consultants PricewaterhouseCoopers. Sales of domestic brands, meanwhile, dropped 5 percent to 800,000 units.

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