|                                                                                                                                                             |  | REGIONAL CORNER: TOGLIATTI, RUSSIA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|**BISNISHome PageSearchBISNISEmbassyReportsCountryReportsIndustryReportsPublicationsSourcesof FinanceLeadsand EventsExchangeRatesState ExportsOtherSources** |  | December 1997/January 1998by Laurel HendersonThe city of Togliatti is a major center of Russia's automotive industry and the second largest city
in the Samara oblast--one of three key regions designated by the U.S. and Russian governments
for their joint "Regional Investment Initiative."  Togliatti was never closed to foreigners during
the Soviet era and today the municipal administration welcomes foreign firms to help diversify the
city's economy.  Situated 1,000 kilometers southeast of Moscow on the Volga River, Togliatti
has one of Russia's highest standards of living.Industry
The city owes its relative wealth to AvtoVAZ, Russia's largest manufacturer of passenger cars,
which employs 120,000 people in Togliatti--roughly one-sixth of the population.   AvtoVAZ
produces the popular Lada automobile--also known as the Zhiguli--as well as the Lada Niva
four-wheel drive vehicle.  The company supports numerous local suppliers and is engaged in a
variety
of non-automotive ventures, as well.AvtoVAZ is also Russia's largest tax debtor, owing $1.37 billion to the Russian Federal
Government, and is troubled in other ways as well.  Much of its manufacturing equipment is
original to the plant, which was built in cooperation with the Italian carmaker Fiat in the 1960s. 
Significantly, the Italian company recently announced plans to invest in joint production of its
"Palio" model with GAZ, a major AvtoVAZ competitor.Togliatti is also  home to Transformator, a manufacturer of power generation equipment, the
TogilattiAzot chemical plant, and a number of other manufacturing enterprises.  Togliatti is the
home of Dovgan, a private manufacturer of food and beverages that are widely distributed in
Russia.  Danone Volga, a joint venture between France's Danone, the Togliatti Milk Plant, and
AvtoVAZ, produces yogurt in Togliatti.Transportation
Togliatti is well-located for both domestic and international transport.  Samara International
Airport, located 60 kilometers from the city, offers frequent flights to Moscow and other Russian
and NIS cities, as well as to destinations in Western Europe and the Middle East.  Lufthansa
offers regular connections to Frankfurt and a local carrier, Samara Airlines, has scheduled
service to Vienna, Tel Aviv, and Larnaka.  The airport is beginning a $675 million modernization
which will include a new landing strip, terminal, and service zone.  Negotiations are underway
with Lufthansa Cargo and DHL on financing the modernization project.The entire Samara oblast, including Togliatti, is well-served by Russia's road and rail networks.  
The European Union's TACIS program has selected Togliatti's river port to receive technical
assistance for developing Russia's inland waterways.Foreign Activity
According to the city administration, Togliatti attracted $87 million in foreign investment in 1996. 
Some 33 foreign companies are represented in Togliatti, including General Motors, Lufthansa
Airlines, DHL, Federal Express, Estee Lauder, and Hyundai.   Price Waterhouse works with
various local clients, including AvtoVAZ Bank and AvtoVAZ.  The European Bank for
Reconstruction and Development's Russia Small Business Fund works with local banks to fund
Togliatti small businesses.Since 1993, the United States Peace Corps has worked with the city administration to attract
foreign investment to Togliatti.  Each year, the city hosts the InterVolga International Business
Conference, which promotes trade and investment in Togliatti and the Samara oblast.  The next
InterVolga Conference is to be held in May 1998.For more information on Togliatti and the
Samara region, visit BISNIS Online at
www.mac.doc.gov/bisnis/country/regions.html#VolgaUrals.Laurel Henderson works for BISNIS in Washington, D.C.This report is provided courtesy of the Business Information Service for the Newly
Independent States (BISNIS)