Siemens VDO takes majority stake in Russian Avtel

BRUSSELS — Siemens VDO has agreed with Russian automotive supplier Avtel to acquire 51 of the latter one's shares. The company hopes to benefit from high growth rates in the Russian automotive market.

Avtel is a joint venture of the Russian companies Avtelectronica and NPP Elcar. By acquiring the Avtel majority stake, Siemens VDO will become the dominant partner in the JV. The company founded in 1999 develops and produces electronic automotive components including engine controls, sensors and injectors. In 2005, Avtel achieved sales of €35 million ($44,1 million).

With the move, Siemens VDO intents to strengthen its position in the fast growing Russian automotive electronics market. The company already runs a manufacturing facility for instruments and tachographs in Christopol. In addition, Siemens is participating in a joint venture with NPP Elcar for developing engine management systems in Moscow.

"Due to the high growth rates of the Russian automotive market, we see good prospects for suppliers", explained Reinhard Pinzner, Group Vice President of Siemens VDO automotive. Avtel now hopes that the Siemens VDO participation helps the company to sell its products also to western European, and Asian OEMs.

Financial details of the transaction were not disclosed.