To save from bankruptcy: the new President of AVTOVAZ Nicolas Moore

The President of Romania

The Board of Directors of AVTOVAZ approved Tuesday as the new President of the company, Nicolas Mora, who was earlier a post of the President of the Romanian automaker Dacia, part of Renault-Nissan. The decision comes into force on 4 April, when AVTOVAZ will leave his current leader Bo Andersson, said in a company statement.

In the message of Alliance Rostec Auto BV (JV Renault-Nissan and Rostec, which controls AVTOVAZ) States that in recent years Togliatti plant upgraded range and production processes, and significantly improved product quality. “With the arrival of Nicolas Mora, we plan to continue to follow that strategy. And we continue to defend our vision for the future of the Russian market and AVTOVAZ, as the leading players of the Russian automotive industry, in the long term,” given in the message words of the Chairman of the Board of Directors of AVTOVAZ and President of Renault-Nissan Carlos Ghosn.

According to the General Director of Rostec Sergey Chemezov, whose words are given in the report of AVTOVAZ, the Mora task is to create a highly competitive product, increase market share and provide an effective process of downloading of the Russian production of the component base.”All these tasks will be facing the new leader. We expect he deal with them”, — said Sergey Chemezov.

Thank Andersson for two years at the Togliatti plant of AVTOVAZ shareholders did not.

A tough Manager

A 56-year-old Mora degrees in mathematics and engineer and an MBA. In the structures he is working with Renault 2000: started as Director of purchasing of parts and accessories to the Vice-President of Renault-Nissan purchasing of engines, gearboxes and transmissions. From 2006 to 2008 he was Director of the Dacia plant in Romania, and in January 2014 became the company’s President.

Dacia is the largest revenue company in Romania (in 2015, to 4.2 billion Euro). The plant was founded in 1967 in the small town of Mioveni. By the end of the 1990s, the automaker was on the verge of bankruptcy and came under the control of Renault. The French modified old platform and in 2004 he put on the conveyor model Logan, which became a hit in the European market, says the chief editor of “autobusinessreview” Sergey Baranov: “the Machine was cheap and good quality, the ones provided are not so far”. Later on the same platform, the developed models Sandero, Duster and Logan MCV (in Russia — Lada Largus). On the Russian market all these models are among the ten best-selling cars. “The Renault for the first time in its history, made on the same platform is actually a full model range. The Dacia project can be considered one of the best decisions of the head of Renault-Nissan Carlos Ghosn”, — said Baranov.

Leading Dacia, Mor has announced its aim of maintaining the competitiveness of the enterprise. He had to cut staff and slow down the rate of growth of wages. The outgoing President of AVTOVAZ Bo Andersson for 2014-2015 reduced the staff by about 19 thousand people, or 28%, to 48 thousand employees. This angered the General Director of “Rostec” (indirectly owns 24.5% of AVTOVAZ), Sergey Chemezov: “This practice probably European, we believe that this can not be done, you should behave more flexible”.

When Sea Dacia became the fifth in Europe by number of vehicles produced. By the end of 2015 on the Romanian site were collected about 340 thousand cars at capacity of the local market 81 thousand cars (ACEA data). 90% of the cars exported. The aggregate volume of production (since 2012, the Dacia cars are also going at the Renault plant in Tangier Moroccan) amounted to 551 thousand cars, which is 3% higher than a year earlier. The company does not disclose profits, but it is, said in an interview with the Romanian media more.

New challenges

The scale roughly corresponds to the AVTOVAZ Dacia, on the Russian plant being assembled the models on the Logan platform. But the financial situation is worse than at AVTOVAZ. The Togliatti plant is unprofitable in 2012. In 2015, the plant received a record loss of 74 billion rubles, production declined by 11% to 465,5 thousand cars taking into account contract Assembly. In conclusion, to reporting for 2015 Ernst & Young doubted that the company would be able to work.

The Russian car market is shrinking for the fourth consecutive year. From a peak of 2012 to 2.9 million car market by the end of 2015 may be reduced to 1.1 million cars. Lada aggressive in wiping out foreign competitors.

The first thing to do to the new head of AVTOVAZ solve the problem of expensive components (components account for about 75% of the cost Lada) and to increase the level of localization of production, says Executive Director of Avtostat Sergei Udalov. Mora will have to increase exports to compensate for falling sales in the domestic market, but also to continue Andersson cost optimization, adds Vladimir Bespalov from “VTB Capital”.

In the medium term, AVTOVAZ will need new models, Bespalov continues. According to Udalova, the plant will not prevent and diversification of production, for example, through the development of component business for other manufacturers and industries.

Staff reductions, which became one of the reasons for the resignation of Bo Andersson, Mora may not have to carry out, involves Udalov: the staff of the plant close to optimal. But, the expert is agreed, it will all depend on the situation in the economy and the pace of market recovery. Sales growth will push the Russian AVTOVAZ to suppliers, I’m sure the first Vice-President of the Union of machine builders of Russia Vladimir Gutenev.