Renault becomes the strategic partner of avtovaz

• Sergey Chemezov, Head of Russian Technologies, Chairman of the Board of AvtoVAZ, Serguei Skvortsov, President of Troika Capital Partners and Carlos Ghosn, President and CEO of Renault signed on December 8, 2007 a Memorandum of Understanding (MOU) in Togliatti, Russia.

• This partnership would allow AvtoVAZ and Renault to:
o Accelerate the development of AvtoVAZ, renew and expand its vehicle range
o Grow the Lada brand while respecting its identity, in order to maintain its leadership
o Share technological expertise and know-how

• Russian Technologies, currently representing the main shareholder of AvtoVAZ, would keep an interest in AvtoVAZ’s capital and ensure continuous support from the Russian State.

Russian Technologies and Renault would become equal shareholders of AvtoVAZ in the spirit of a long-term partnership. Once the capital of AvtoVAZ has been restructured in the first half of 2008, a holding equally owned by Russian Technologies and Renault would control a total of 50% of the shares of the company (AvtoVAZ). Renault would become a significant AvtoVAZ shareholder.

AvtoVAZ and Renault would share know-how and technology particularly in relation to manufacturing and marketing and with the aim of improving the attractiveness, competitiveness and overall quality of AvtoVAZ’s products. They would also exchange executive managers in various fields of expertise in order to optimise integration and boost the transformation of AvtoVAZ into a global automotive player with a capacity of well over 1 million vehicles per year. The partnership would also include cooperation in relation to engines and gearboxes with the view to equip both AvtoVAZ and Renault vehicles.

This investment should also significantly contribute to enhancing Renault and the Renault- Nissan Alliance’s competitive position on the Russian market.

AvtoVAZ would benefit from Renault’s contributions in relation to platforms and powertrains which are expected to help the company to renew faster and enhance the entire Lada product line. This would apply to AvtoVAZ’ C-segment project.

Russia should become Renault Group’s main market as a result of the partnership. Sale volumes of Lada vehicles, in agreement with AvtoVAZ and its
shareholders, will be consolidated by Renault. Consequently, sale volumes represented in Renault’s Commitment 2009 will be revised upwards.

This agreement punctuates a long and transparent selection process that led to Renault’s offer being considered competitive financially and the best from an industrial and technological viewpoint.