AvtoVAZ plans to launch production of three models in the near future – Lada Granta, Niva Legend and Niva Travel. In the future, as components and electronics are localized, the auto giant may enter the production of other models, such as Lada Largus, Vesta. From this, in an interview with Izvestia at SPIEF-2022, the president of the concern, Maxim Sokolov, spoke. He also noted that the release of Renault models – Duster, Logan and Sandero on an updated platform – the issue has not yet been fully resolved. According to Maxim Sokolov, for the production of Moskvich, Lada’s developments can be used – Moscow colleagues have already been made a proposal to use not only individual components, but also a joint platform. The head of AvtoVAZ did not rule out that in the future the car plant could start producing electric cars and electric scooters – Togliatti already has such developments.
“From July we are resuming the production of Niva cars”
– The authorities will allocate almost 21 billion rubles to support demand in the automotive industry – this has already been announced by the head of the Ministry of Industry and Trade Denis Manturov. How much will AvtoVAZ receive and what do you need the money for in the first place?
— Money is always needed, but we see that, first of all, it is necessary to support demand, oddly enough. All automakers in the country have stopped work for an indefinite period due to the shock consequences of the imposed sanctions regime. Most of the auto components were included in the list of sanctions restrictions, but at the same time AvtoVAZ has already launched its assembly line and the first Lada Grantas began to roll off the assembly line and enter our dealer network on June 8th.
We see that while demand froze, it was also a shock for our consumers, the situation is typical not only for automakers, but also for companies that produce many other durable goods. Now demand is gradually starting to recede, and this is where it just needs to be supported. Therefore, most of this amount announced yesterday (June 16. – Izvestia) following a meeting with the President of Russia will be directed precisely to support car loans, preferential, but only for those cars that have just been put into production.
— Which cars, besides Lada Granta, are planned to be launched in the near future?
— Since July, we are resuming the production of Niva cars, the first one will leave the assembly line in a historical look, the Legend model, then the production of the Travel model will also be resumed. Now we are confidently looking at the prospects for this year, we believe that at least these three models will be accurately produced at the plant in Togliatti and will fill the market, warm up demand. In the future, we may enter the production of other models, such as Lada Largus, Vesta, but this will largely depend on the speed of localization of certain components and auto components that are now under sanctions.
– According to the agreement signed by the Ministry of Industry and Trade with Renault, Avtovaz can continue to produce under license Renault Duster, as well as Renault Logan and Renault Sandero on an updated platform. When will it be possible to do this?
— We must assess the risks of restarting this production, because the set of components that come to us from abroad is constantly updated. There was the first, second, fifth, sixth package of sanctions, now the seventh is being prepared. What will happen next, we do not know, so spending serious investments now on re-equipping AvtoVAZ production lines to launch these models, which at any moment may fall under sanctions, is a serious risk. We weigh the expediency, evaluate the economic efficiency of production, because according to our agreement we will have to pay royalties to Renault for the release of these models under the Lada brand. Now we are in the stage of making decisions whether to produce these machines or not.
“This year, AvtoVAZ will invest a little less than a billion rubles in development”
– The main problem now is the localization of components, the electronic base. With whom are you currently negotiating among our suppliers and maybe you are considering some of the foreign companies as partners?
— We are considering both our own and, of course, foreign manufacturers of auto components from friendly countries. I would not like to name anyone right now, for obvious reasons, because there is a risk of secondary sanctions and, at least, the negotiation process is underway, contracts have not yet been signed. But we, having reformatted our logistics supply chains, look at the composition of our partners from the point of view of the supply of various assemblies, parts and components. At the same time, of course, we focus on domestic manufacturers operating primarily in the Samara region. Since the founding of AvtoVAZ, a cluster for the production of auto components has been formed, but in the Volga Federal District, in St. Petersburg, there are also large factories, manufacturers with whom we are already negotiating.
— Is it planned to use the developments of Lada for the production of “Moskvich”, at a plant in the capital?
Good strategic question. In fact Moskvich’s future is just emerging, and we are partnering with our colleagues in Moscow to produce a completely new car. We have already made our proposal that not only individual components, but also the platform should be joint in the future. We are now facing a strategic task in developing a completely new, but at the same time our own localized platform, on which Lada cars will be produced. It would be good if other domestic cars used this platform, including Moskvich.
— What new models can be produced on this platform?
– I will not name the brands yet. At the very least, we do not intend to move away from the traditional Lada brand, which has been on the market for a long time and grew out of the old Soviet Zhiguli brand. We believe that these brands should be used to develop the entire family of cars. Such as those currently produced – Niva, Vesta, Granta. Well, and perhaps in the future there will be new Ladas, including the X-RAY.
— Who will develop new models? Who will be the new AvtoVAZ designer?
— AvtoVAZ has one of the most powerful centers for scientific and technical developments and research in the automotive industry in the country. We will develop and maintain this competence.
– Previously, this was done by a designer from Renault …
– A good team was created, including Russian designers, Russian designers, it has been preserved, and we will support and develop this history. This year, AvtoVAZ will invest a little less than a billion rubles in various research and development projects, including the future shape of the new platform.
“Lada produces electric unmanned trucks”
— Are you considering the production of electric vehicles? There have already been such attempts at AvtoVAZ. Will these models become competitors to KAMAZ electric vehicles, which is also going to produce them?
“No one needs to be afraid of competition, including us. We are not afraid of the arrival of new players in the industry. The main thing is to have stable conditions, the ones we have now. So that only highly localized enterprises that have signed an appropriate agreement with the Ministry of Industry and Trade receive state support. And in the long-term strategy, we set ourselves the task of developing an electric vehicle. What will its appearance – a hybrid or a pure electric car – will determine the futureincluding the future of the development of electric vehicles in the world, and we must comply with global trends, even if someone does not want to cooperate with AvtoVAZ.
At the same time, nevertheless it cannot be said that the century is over for the internal combustion engine. It still has certain prospects, at least within the next decade.and we plan to develop the Lada lineup on this traditional technology in the medium term.
— But do you plan to move away from cars a little and start, for example, the production of electric scooters? Today it is a very mobile and modern mode of transport. Or, for example, motorcycles?
As the saying goes, “never say never.” Why not? Moreover, as a side production, Lada produces electric unmanned trucks for internal factory logistics.
– There are already developments.
And they are in great demand. Therefore, I will say this: everything is possible, we do not refuse a single valuable strategic thought.
“For the car to be affordable, budget and truly popular”
– What will happen to the export of AvtoVAZ? Which countries and which models are you planning to ship to?
– Time will tell, the situation. But we do not abandon plans, firstly, for production at our sites abroad, neither in Kazakhstan nor in Uzbekistan, and, of course, we always see our Eurasian Union, the CIS countries, and, possibly, the countries of the Middle East as a priority foreign market East, Africa, Latin America. All this is in our plans and, moreover, the export component, although it occupies a small share in the sales of our cars, is present at the moment.
— Are you currently negotiating with Chinese manufacturers? Can you meet and discuss further cooperation?
— Negotiations are being held with everyone who wants to develop cooperation with AvtoVAZ, who wants to contribute to the progress of the Russian automotive industry. We do not refuse and do not put an end to any possible partnerships, but at the same time we proceed from our own interests.
Today, a Lada car of any configuration is quite competitive in its class. Yes, we are now producing cars only in class B, but the new platform that I spoke about will provide for the possibility of a gradual transition to another, higher class. The developments made by our Russian VAZ design engineers will always be relevant. We believe that the state has come to the share capital of the company for a long timeand no matter what options for further developments are considered, state control over the developments that were made at AvtoVAZ will not be lost.
– What measures are planned to be taken to ensure that car prices do not grow much, so that domestic cars are available to consumers?
– This was also discussed at a meeting with the President. Of course, we will maintain the strictest control over the cost of the car. Today, all technological processes have been debugged with very high meticulousness and control over the formation of the cost, and, as a result, the final price of the car. We will continue to adhere to this policy in the future. Of course, the cost of logistics and the electronic components of the car will increase – this is a consequence of external circumstances that we need to deal with. But everything that concerns and is subject to internal control, we will strictly observe so that the car is really affordable, budgetary and truly popular.
— Do you intend to optimize the staff in connection with the current difficult conditions?
— We plan – especially taking into account the strategic tasks that our shareholders set for us – to keep the workforce, our team and if the production of AvtoVAZ cars is increased in the medium term, then I am sure that the size of the team will grow accordingly, depending on.
– Russian President Vladimir Putin said that before September 1, it is necessary to develop a new strategy for the development of the automotive industry. Will AvtoVAZ have its own separate strategy?
— It will be an integral part of this strategy, because AvtoVAZ has been and remains the flagship of the Russian automotive industry. I am sure that in the new strategy he will take not just a worthy, but an advanced place.
– Will this strategy prioritize, for example, electric transport, gas or hydrogen vehicles?
– The final word on the approval of the strategy, of course, belongs to the Ministry of Transport, the government, but we will definitely make our proposals on behalf of AvtoVAZ.