“AVTOVAZ” increase market share, while the Western car industry in Russia is experiencing a crisis

“AVTOVAZ” increase market share, while the Western car industry in Russia is experiencing a crisis

MOSCOW, November 18. The declining purchasing power of the Russians and the falling demand for cars has led in 2015 by the close of the American GM plant in St. Petersburg, downtime productions and reductions in the Russian companies the European automakers, but played into the hands of the Russian automotive industry.

Thanks to lower prices and state support programmes, he was able to strengthen its position.

The reduction and suspension Ford

Ford Sollers on November 18 sent on vacation at once two Russian Assembly plant for cars – Vsevolozhsky Assembly plant of Ford Focus and Ford Mondeo and Assembly plant of Ford Fiesta and Ford EcoSport in Naberezhnye Chelny. Car production in the Leningrad region it is planned to resume on January 15. The plant Ford Sollers in Naberezhnye Chelny goes from break in January.

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Unscheduled stop this year threatens another Tatarstan Ford Sollers plant in Elabuga. “Production site of Ford Sollers in Naberezhnye Chelny stopped, it is expected that on December 15 will also stop the conveyor at the plant Ford Sollers Yelabuga”, – said the head of the press centre of the Federation of trade unions of the Republic of Tatarstan Irina puzakova on Wednesday. Elabuga plant assembles Ford Kuga, Ford Explorer and Ford Transit.

The plant Ford Sollers in Naberezhnye Chelny there are about 1.3 thousand employees, the staff at the plant in Elabuga is about 1.5 thousand people. According to Puzakova, for the period of downtime the car will pay employees two-thirds of the salary.

The company in Vsevolzhsk works about 1.4 thousand people, but in November there was launched the program of voluntary layoffs, which, according to experts, could affect 180-190 people. In 2014, by agreement of the parties Leningrad plant left 700 employees. Last year Vsevolozhsky power plant were loaded by 25-30%.

GM left Russia

In the beginning of the year about the conservation of the plant in St. Petersburg, said the American concern General Motors (GM) – was first terminated full cycle production models of Chevrolet Cruze and Opel Astra, then SKD Assembly of the Chevrolet TrailBlazer and several Cadillac models.

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Reduction affected almost all employees of the company. According to prosecutors, a gradual reduction has affected 915, Smolny gave a figure of 800 people, explaining that some employees will remain to serve canned production, GM Auto itself was limited to the approximate figures on the number of employees of the plant – about 1 thousand people including office staff.

Fired GM employees got a job in the shipbuilding industry, tobacco industry and automotive industry, reported by the official service and recruitment Agency of the company. Meanwhile, the trade Union of automobile and the authorities of St. Petersburg talked about the fact that former employees of the automaker experienced difficulties with employment.

“All the 900 employees that worked there, have an idea about vacancies on the labour market. The problem is that trade unions have played a destructive role – its active position, they made it so that this people today with General Motors is not very likely to take in the industry,” – said the head of city Committee on labor and employment Dmitry Cherneyko in April. He said that former employees of the plant, registered on the territory of St. Petersburg, in the case of treatment will be granted the allowance to residents of other regions (about a quarter of all workers) – only advice and assistance in finding employment.

Conservation GM has allowed Hyundai in the first nine months of 2015 to increase its market share in St. Petersburg produced machines up to 74%. The share of Toyota and Nissan, the production of which is also located in the Leningrad region, amounted in January-September of 20%.

St. Petersburg plant Toyota crisis if spared. The company by the end of 2015 will double production capacity to 100 thousand cars a year. In 2016 it is planned to expand its staff to 800 people. Toyota now assembles the updated model Toyota Camry, 2016 launches the RAV4. The company functions in two shifts 1.8 thousand people.

Short week Peugeot and Volkswagen

Kaluga carmaker pcma Rus (JV of Mitsubishi Motors and PSA Peugeot Citroen) from 1 February 2016 to 31 July 2016 will work only four days a week. “In order to implement the measures on implementation of the annual plan of production of cars in 2016, prevent mass dismissal of employees and, consequently, the preservation of jobs, “PSMA Rus” introduces a regime of part-time work”, – reported in a press-service of the company last week.

Within four months of 2015, the plant was idle, and in the spring were terminated the employment contract with hundreds of employees of the automaker. “PSMA Rus” assembles Peugeot, Citroen and Mitsubishi.

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Kaluga plant of Volkswagen in 2015, limited to a five-month transition to four-day session, but said goodbye to 600 employees. While plans to reduce staff or work week in the factories there. Volkswagen assembles the Volkswagen Polo Sedan, Volkswagen Tiguan and Skoda Rapid.

The authorities of the Kaluga region claim that the critical times for the automotive cluster in the region were: in 2016, counting on the stabilization of the situation in the auto industry field, and since 2017 – expected growth. “The automotive industry in the Kaluga region dropped last year and this year, but the rest of the industry feel good. Next year will see overall improvement in the situation. The automotive industry, we believe that will go to decent growth in 2017, in 2016 the situation will be stable, without critical changes,” – said the first Deputy Governor of the Kaluga region Alexei Laptev.

Sales of passenger cars fell by a third

According to the Association of European businesses, sales of passenger and light commercial (LCV) cars since the beginning of the year fell by 33.6% to 1,322 million cars. In October the rate of decline of the market accounted for 38.5% – 129,9 thousands of machines. By the end of 2015, the decline of the Russian car industry should not exceed 30%, said Deputy Prime Minister Arkady Dvorkovich, speaking during government hour in the state Duma on November 11.

“There were forecasts that the decline will amount to 50%, but the use of anti-crisis measures, said from this podium, (first Deputy Prime Minister) Igor Shuvalov, made it possible to prevent this decline – according to our estimates, it should not exceed 30%,” – said Dvorkovich.

The top three best selling brands in Russia by the end of October became LADA (a decrease of 46% to 20.6 thousand cars), Kia (down 17% to 14.4 thousand) and Hyundai (down 8% – to 14.1 thousand cars). The best selling models last month became Hyundai Solaris (9,5 thousand cars), Lada Granta (9.3 thousand cars) and KIA New Rio (9 thousand cars).

To minimize losses of transport companies is helping support manufacturers. It provides the Ministry of industry and trade, which stimulates the demand for cars through various mechanisms (subsidy of interest on car loans, the preferential purchase of automobiles through the utilization and preferential car leasing). Deputies of legislative Assembly of Leningrad region last week upheld the law on two-fold decrease in the property tax for the enterprises of the regional automotive cluster for a period of three years. Furthermore, on 16 November, Prime Minister Dmitry Medvedev signed a decree providing additional loading of the enterprises of the automobile industry.

Dvorkovich stressed that the greatest benefit from the use of anti-crisis measures are getting Russian automakers. “Comprehensive support of the city of Togliatti, AVTOVAZ has allowed the overall situation in the region stabilizes. However, this issue remains at the center of our constant attention, and measures related to the labour market, the creation of replacement facilities, as well as market their new line of cars – all this remains among our priorities,” he said.

LADA expands the range

Despite the decline in purchasing power, “AVTOVAZ” in 2015, began serial production of LADA Largus Cross and LADA Vesta in Izhevsk in mid-November, started the Assembly of LADA Granta in Chechnya and talks about the organization of the Assembly at Chechen plant LADA Vesta in 2016.

December 15, “AVTOVAZ” will start serial production of the new model LADA XRAY, which will go on sale in February 2016. In addition, the group plans this year to increase the production of LADA 4×4 Urban, the next step is to start the production of LADA Vesta Cross.

The Russian company, despite low purchasing power, planned in 2015 to increase production of cars by 20% in comparison with the previous year – almost to 619,6 thousand cars. However, in the middle of the year, the group said it will adjust the production schedule for this year amid deteriorating economic situation. According to the latest data, in 2015 AVTOVAZ can produce about 500 thousand cars. And to increase its share on the Russian market from 16.5% in 2014 to 19% in 2015.

“We will try our best to keep market share at 19%, last year in the first half of this percentage was 16.5%, these six months, our share is 19%,” – said the President of “AVTOVAZ” BU Anderson, stressing that “AVTOVAZ” produces “good cars, good quality”.

Officials will change on the LADA Vesta

The quality of the cars already appreciated by the top management of AVTOVAZ, which last year was transferred to the cars of a domestic production. This experience now takes over the leadership of the Samara region – in 2016 plans to buy 50 cars LADA Vesta to transplant them officials of the regional government. In the future 80-90% of officials and employees of state-owned enterprises in the Samara region will change on the production of cars “AVTOVAZ”.

Plans for the refusal of officials from foreign cars of the Samara region Governor said in October 2014, referring to the need for “fiscal austerity”. Serial production of LADA Vesta began at the plant “IzhAvto” on September 25, 2015.

This year it is planned to produce 5 thousand LADA Vesta, and next year up to 70 thousand. According to preliminary data, the price of the model will be from 495 to 600 thousand rubles. Sales of LADA Vesta will begin on 25 November.

The Automotive Cluster In The North Caucasus

Stavropol region has announced its intention to create in the North Caucasus automotive cluster, which will include construction in the region a plant for manufacturing cars budget Chinese brands, Circassian plant Derways, collecting Lifan, and Chechen Argun plant “Chechenavto”. The question of creation of special economic zone of industrial-production type “Argun – Stavropol – Cherkessk” is already almost solved – the request from the heads of the three actors sent to the Ministry of economic development.

Contrary to the trends of the market automakers, in the Stavropol territory remain the launch date of a new automobile, a willingness which currently stands at 60%. “Despite the economic problems in the industry, every effort would be made to not deviate from their respective schedules of start-up enterprises”, – said the Minister of energy, industry and communications of the region Mr. Vitaly khotsenko. It is planned that the Stavropol plant to become operational by the end of 2016.

Under the project, the region will be about 20 models and modifications of vehicles involved brands with different models. The products are targeted at the mass segment of the Russian automotive market: classes “b”, “C”, “Crossover” in these classes, and SUV’s. The first phase is expected to produce 100 thousand cars annually with an investment of more than 9.6 billion roubles, but then production can be doubled.

Derways, along with AVTOVAZ, also announced plans to expand the model range – from 2016 the company plans to begin assembling two new models of Lifan cars. “One of them is the sedan Lifan 650, the second specified”, – said the representative of the company. Now the plant produces six models of this car.

Derways in this year plans to let out 20 thousand cars, which is more than two times less than last year. Despite the decline in production this year, the enterprise has resumed the Assembly of Chinese cars Geely, were suspended in late 2014 on the initiative of the partner due to the difficult economic situation. Again produced all four models Geely: Emgrand EC7, MK08, MK Cross and GC6.