HispanicBusiness

Last year, the last Volga rolled out of the Gorky Automotive Factory, clearing enough floor space for three foreign manufacturers -- G.M., Volkswagen and Mercedes -- which collectively employ about 5,000 people.

"It's a shame we lost the Volga," Aleksandr Kazanin, a worker here, said. "But we're still here. We kept our jobs."

Avtovaz, the maker of Russia's other main brand, the Lada, is also charting a future based on a strategy of forming joint ventures with foreign car companies -- in its case, the alliance of Nissan and Renault.

Just this month, the French-Japanese alliance formalized an agreement to buy a controlling stake in Avtovaz from the Russian government, bringing all of the country's car industry under foreign management or ownership for the first time in the post-Soviet period.

Last spring, Avtovaz, located in Togliatti down the Volga River from here, halted the 38-year production run of its Lada Classic, the boxy and much-maligned people's car of the former Eastern Bloc that was originally based on a Fiat design.

The new version of the Lada will be based on the chassis of a Renault Logan, a car already selling briskly.

Nissan has said it will use some factory floor space -- available because of the end of the old Lada production -- to reintroduce its Datsun brand, last seen in the 1980s but being revived as a bargain car for fast-growing developing markets where people are entering the middle class.

G.M. is also investing in the Avtovaz factory, one of the world's largest car plants by acreage. G.M. will spend $200 million to expand a joint venture making a Chevrolet sport utility vehicle called the Niva, which has been a hit here.

Russia is now the world's ninth-largest economy, but the seventh- largest car market, showing the Russians' tendency, after decades of deprivation in the Soviet period, to splurge on cars over other purchases. There are now 250 cars for every 1,000 people in Russia, which places the country about midway between emerging markets in Asia and developed markets in Europe. By comparison, India has 11 cars for every 1,000 people; China, 49; Germany, 515; and the United States, 643.

"It makes sense to invest where you have a good growth," said Vladimir Bespalov, an automotive analyst with VTB bank. "This is the trend, and the growth is in the emerging markets."

The four big auto groups -- Ford, Renault, G.M. and Volkswagen -- have signed agreements with the ministry of economy to each increase local production to 350,000 cars a year, build engine factories, and invest in research and development.

These foreign carmakers are choosing to manufacture in Russia instead of importing vehicles in part because of the country's onerous rules on imported cars. Despite Russia's accession to the World Trade Organization this year, which lowered tariffs, the government has continued to nudge companies to invest in local production by imposing a $700 fee on imported cars, ostensibly for recycling the vehicle when it breaks down.

Russian plants avoid the fee. They promise instead to accept irreparably broken-down cars at the factory for recycling, presumably after being towed back.

Critics call it a fanciful idea, an example of Russian red tape thinly disguising protectionist policies. This is fine by Bo Andersson, a former G.M. executive hired in 2009 to manage the transition at the Gorky Automotive Factory.

"I like Russia because it's difficult," he said. "If it were easy, I would have a lot of competition."