How the Fiat 124 Became the VAZ-2101: The Soviet-Italian Deal That Changed Automotive History

Half a Century of the Zhiguli: On April 19, 1970, the First VAZ-2101s Rolled Off the Volga Auto Plant’s Assembly Line. How—and by whose decision—did the Fiat 124 become the VAZ-2101? How much of the first Zhiguli was driven by politics, and how much by engineering? What was Soviet, and what was Italian?

It’s often claimed that by signing the so-called “deal of the century” with the FIAT Group, the USSR was supporting the Italian Communist Party. After all, politics is said to be the concentrated expression of economics. But where’s the evidence?

One of the strongest proponents of Soviet relations was Enrico Mattei, head of Italy’s ENI oil and gas corporation. A non-communist, Mattei traveled to Moscow in 1958 to negotiate oil supply contracts—not out of ideology, but to free Italy from the dominance of the “Seven Sisters” (as he dubbed BP, Exxon, Gulf Oil, Mobil, Royal Dutch Shell, Chevron, and Texaco). From there, trade blossomed: in exchange for oil, the USSR began importing industrial equipment, and credit lines were opened. These were risky dealings. Many believe Mattei’s death in a 1962 plane crash was orchestrated by the CIA.

Even FIAT President Professor Vittorio Valletta had to personally reassure U.S. President Lyndon B. Johnson that the contract with the USSR aimed only to “improve living standards for Soviet citizens.” He encountered fierce resistance—so much so that even the Vatican denounced the deal as a pact with “antichrists.”

Also navigating this political minefield was Piero Savoretti, head of the intermediary firm Novasider. A close associate of Valletta, founder of the Mille Miglia race, and husband to a Soviet Intourist interpreter, he played a key role in organizing a grand Italian exhibition at Moscow’s Sokolniki Park on May 28, 1962. Nikita Khrushchev attended—a figure often overlooked in this story. While Brezhnev and Kosygin are typically credited with the VAZ project, it was Khrushchev who gave the initial go-ahead. Savoretti arranged a meeting between Khrushchev and Professor Valletta. According to Riccardo Quivino, FIAT’s head of special relations, Khrushchev said, “I’m sending Kosygin to you. Don’t deceive him—he’s a good man.”

A month later, Quivino was guiding First Deputy Prime Minister Alexei Kosygin through FIAT’s factories. He recalled that Kosygin pronounced the Agnelli name with a hard “g”—“Agnelli,” as written.

Quivino’s memoirs include a fascinating detail: as early as 1956, FIAT considered selling the license to produce the rear-engine Fiat 600 in the USSR. Why it didn’t happen remains unknown. Ironically, that very model became the basis for the first Zaporozhets.

So why the Fiat 124—especially when even its chief designer, Dante Giacosa, considered it ill-suited to a country as vast and rugged as the USSR?

In January 1965, the Scientific and Technical Council of the Auto and Tractor Machinery Committee, held at VDNH in Moscow and attended by both Brezhnev and Kosygin, decided to build a new large-scale auto plant. But which car to build? Comparative testing resumed at NAMI. Among the models tested—Ford Taunus 12M, Morris 1100, Peugeot 204, and Skoda 1000MB—the front-wheel-drive Renault 16 emerged as the favorite. At the time, Boris Fitterman, head of NAMI’s passenger car bureau, was a key advocate for front-wheel drive among Soviet engineers.

Legend has it that Brezhnev settled the debate with a single remark: “Comrades engineers, enough with the technicalities—we’ll handle the politics! Italy is closer to us than France.” Though, it’s said that at his dacha in Zavidovo, where both the Renault 16 and Fiat 124 were presented, he actually preferred the French car.

Separating fact from fiction isn’t easy—but let’s stick to the facts.

On May 28, 1966, Minister Tarasov issued Order No. 124, assigning NAMI to finalize the Fiat 124 and conduct road trials. The elegant Italian sedan couldn’t withstand the rugged Dmitrov proving ground or Soviet test protocols. When Fiat body shells began cracking, a startled Italian delegation was flown in. “Show us your Belgian paving stones!” they demanded. After inspecting the cobbles, Dante Giacosa requested all specifications. Soon, a replica “Belgian road” appeared at FIAT’s Mirafiori plant.

Testing in the USSR led to over 800 modifications—implemented not by Soviet engineers, but by the Italians, under a scientific-technical cooperation agreement signed in Turin on May 4, 1966. Quivino remembers the signing was delayed because “Minister Tarasov overdid it with the toasts.” Simply put—he got drunk.

The only one who refused to sign was Alexander Andronov, chief designer at MZMA. He objected to the outdated cast-iron engine with a low-mounted camshaft, insisting on a modern overhead-cam aluminum unit like that in the Moskvich-412. But the Italians argued that for a car of this class, a cast-iron pushrod engine was ideal—especially since they had just introduced it in 1964.

Yes, FIAT had an overhead-cam variant—the famous doppio asse a camme with twin camshafts and a belt drive—but it shared the same cast-iron block. That engine powered higher-end models, including the Fiat 125, which FIAT offered as “Car No. 2” in the deal. Had the Soviets accepted, they would have received the OHC engine. Instead, they opted for a version that would evolve into the VAZ-2103.

Agreeing with Andronov would’ve required developing a brand-new engine on a tight schedule—production was to begin in just three years. Both FIAT and Minister Tarasov tried to persuade him. He held his ground. A compromise was struck: a cast-iron block with water jackets and a chain-driven overhead camshaft.

Every deal requires compromise. The proposed $320 million credit from Italy’s IMI Bank to the USSR’s Vneshtorgbank wasn’t contested—but FIAT insisted on their standard 7% interest rate. Kosygin, however, instructed Tarasov to demand 5%.

Tensions escalated—enter Renault and the KGB. “Izvestia” correspondent Leonid Kolosov, a.k.a. KGB agent “Kisa,” was tasked with securing better terms.

Kolosov had powerful connections. He had even once come close to seducing Claudia Cardinale. Through political whispers, he spread the rumor that Tarasov had a secret agreement with Renault. Knowing De Gaulle was keen on a Soviet partnership, the rumor shook FIAT, which was already near bankruptcy. Kolosov’s contacts did their job—IMI lowered the rate to 5.6% and offered favorable terms on manufacturing equipment.

Coincidentally, De Gaulle did visit the USSR in June 1966, and a $142 million technical assistance deal with Renault was indeed signed—though for the retooling of the MZMA plant.

Did the Italians sense they were being played? At one point, Professor Valletta smirked at Kolosov and asked, “So, dottore, have you changed careers—from businessman to journalist?”

In August 1966, the USSR and FIAT finally signed a general agreement to build a plant with an annual output of 600,000 cars. But who got the better end of the deal? On February 19, 1968, the USSR Council of Ministers approved a construction budget of 1.1433 billion rubles. Other sources mention 1.57 or even 1.85 billion. Forbes estimated the Togliatti plant cost $887 million, of which FIAT earned $322 million. But indirect benefits are often ignored—like bypassing Western restrictions on technology transfers. FIAT handled it. Two-thirds of the equipment supplied to the Soviets was either made in the U.S. or under American license, including from TRW and Gleason.

The agreement included two models—“Car No. 1” and “Car No. 2.” In addition to the Fiat 124 sedan, the USSR received the Fiat 124 Familiare station wagon, which became the VAZ-2102. Later, production capacity was raised to 660,000 cars per year.

An interesting clause required FIAT to purchase Soviet consumer goods for five years—including hydrofoil passenger vessels. That’s why Soviet “Kometa” and “Meteor” ships soon swarmed the Mediterranean.

The new car needed a name. VAZ designer Alexei Cherny proposed “Zhiguli”—which caused concern. In Italian, “gigolo” has an unfortunate meaning. A naming contest was launched by Za Rulem magazine and Sovetskaya Rossiya newspaper. Among the suggestions: VIL-100 (for Lenin’s 100th birthday), Desina (a blend of Soviet and Italian), Pato (for Palmiro Togliatti), Sovital, Rossita, Tatarin (!), Hundredth Spring, Ilyich, Genius… Top contenders included Volzhanin, Dream, and Friendship, but “Zhiguli” and “Lada” won. Autoexport favored “Lada,” though it means “barn” in Swedish—hence, in Sweden, they were marketed as VAZ. Initially, even Italians used the acronym TAZ, since “Volzhsky Automobile Plant” wasn’t coined until late 1967.

The now-famous “ship” logo was created by Alexander Dekalenkov, a former AZLK designer. It featured a “V” shaped like a Cossack boat with a wind-filled sail, paired with the name of the new city—Togliatti. When a batch of sample emblems arrived from Turin in January 1970, the letter “Я” was mistakenly flipped in Latin style, producing “ТОЛЬRТТИ.” These misprints became prized collector’s items.

In January 1967, a more serious issue arose. Had it happened six months earlier, the deal might have collapsed. Soviet poet Marietta Shaginyan, a Leninist icon, arrived in Italy on assignment from Izvestia. Her minder was none other than Leonid “Kisa” Kolosov. He described her as a cantankerous old woman with a grating voice, fiercely anti-Western. And yet, she bonded with Professor Valletta. In 1945, Valletta narrowly escaped execution for Nazi collaboration—his life spared by communist partisan Luigi Longo. After that, Valletta and Longo maintained a strong rapport. Shaginyan published a series of glowing essays in Izvestia titled Three Days at FIAT.

Meanwhile, a general strike was brewing at FIAT. Workers prepared to walk out—until Valletta read them excerpts from Shaginyan’s reports. The crowd dispersed. A single Bolshevik poetess had averted a strike. Kolosov nearly lost his press credentials over it.

As plant preparations continued, designers were permitted to follow FIAT’s technical specifications rather than Soviet GOST standards. This enabled the introduction of new steel grades, plastics, lubricants, and rubber compounds. Italian standards were often stricter, and Soviet suppliers struggled to keep up. It was a time of breaking down barriers.

The entire nation was preparing for Lenin’s 100th birthday, fueling the myth that the VAZ-2101 was designed as a centennial tribute. Not quite. The contract scheduled “Car No. 1” for 1969 and “Car No. 2” for 1970. But delays meant slogans had to change—from “Deliver the first car by the end of 1969!” to “Let’s assemble the first VAZ for Lenin’s centennial!”

And they did. Which is why we celebrate the birth of the VAZ-2101 in April 2020.

First Assembly

Alexander Kuznetsov worked as an assembly fitter in the main building (Workshop 45, Section 3) from March 16, 1970, until 1978 and took part in assembling the first six production vehicles:

“On the morning of April 18, 1970, six car bodies were lowered onto the line: two cornflower blue, two white, and two burgundy. We assembled them over exactly 24 hours, and the finished cars were driven off the conveyor at around 5:00–5:30 a.m. on the 19th. Everything was done unhurriedly. Between each body shell, we left 10–12 empty conveyor hangers. The line didn’t move forward until one team had completely finished work on all the cars. The teams were still understaffed—sometimes only two or three people. Once completed, the cars were rolled into a hangar cobbled together from panels, hidden away from prying eyes. If anything wasn’t quite right, the Italian technicians would exclaim, ‘no bene!’—meaning it wasn’t good—and make us redo the operation. By the way, about a thousand of the first cars were fitted with Italian-made powertrains, transmissions, rear axles, and suspensions. Sometimes you’d grab a driveshaft from the box and it’d be too long—clearly from a Fiat 125. You’d smirk, toss it back, and grab another one. Ah, the Italians!”

The Vocabulary of a Veteran VAZ Worker

Nítka — The assembly line in the main building. There are three of them in total.

Tavéer — A lower push-type conveyor consisting of carts that move in sync with the overhead hangers. On these carts, the engine, gearbox, and front and rear axles are assembled before being installed under the body. The term is derived from the English “tow-veyor” (towline conveyor).

Montarsína — The conveyor station where the brake system is bled. The word is clearly of Italian origin.

Vstávki (“extensions”) — Add-on structures attached to the facade of the main building. Their rhythmic spacing helps break up the visual monotony of the world’s longest assembly hall. There are seven official extensions. Humorously, plant workers refer to the administration building as the “eighth extension” and the nearest liquor store as the “ninth.”

No bene — Italian for “not good” (“non bene”), meaning “unacceptable” or “needs to be redone.”

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Contributors: Tatyana Ralka, Olga Tikhova, Stanislav Bereziy, Sergey Iones, Alexey Voskresensky, Denis Dementyev, Nikolai Markov, Alexey Khresin, Maksim Shelepenkov.

Photo: Author’s archive Vladimir Belokopytov, Stanislav Kazakov, Denis Orlov, Vladimir Samokvasov, PJSC AVTOVAZ, FSUE NAMI, ACI, Centro Storico Fiat, Fortepan/Sándor Bauer, Registro Fiat Italiano.

This is a translation. You can read the original article here: Сделка века: как и по чьему решению Fiat 124 превратился в ВАЗ-2101