A $2 Billion Investment Helped Renault Turn Around a Russian Punchline

The Russian city of Tolyatti is named after an Italian communist, Palmiro Togliatti, but it might as well be called Ladaville. There’s the massive Lada car factory, of course, as well as a Lada hotel, a Lada-sponsored handball team, and Lada TV. The local cathedral sports a portrait of Carlos Ghosn—the chief executive officer of Renault, the French automaker that bought a stake in Lada 10 years ago. And half the cars on the streets are Ladas.

The problem for Lada—and Ghosn—is that elsewhere in Russia the brand gets a lot less love. Every Russian knows the jokes: How do you double the value of a Lada? Fill the tank; What do you call a Lada’s shock absorbers? Passengers. And the streets of Moscow and St. Petersburg teem with Toyotas, VWs, and BMWs, with nary a Lada in sight. “For about the price of a Lada, I can get a better-quality Kia,” says Sergey Ivanov, a Moscow tour guide.