Blog: Dave LeggettBig bear AvtoVAZ

Dave Leggett | 25 April 2006

Can AvtoVAZ cut it in Russia? For a long time it looked like the strategy for the declining company was to invite a wealthy foreigner with lots of know-how in. Enter General Motors. But GM kept its exposure limited and ringfenced with its JV making the Niva SUV and an old Astra.

Now it would seem that AvtoVAZ has been earmarked to become a national champion carmaker - something that chimes with the more nationalistic and economically interventionist noises that are popular in Moscow these days. The idea is to get a kind of industrial coalescence around one big vehicle maker and its suppliers - and give it a shot at surviving as competition increases. And there would be various forms of state support for it (while that can be done with impunity; the window is wide open now, might not be in ten years).

It is really not all that different, in practice, to what the Koreans have done; they knew some time ago that only one national group would have the scale and resources to compete internationally. They now have Hyundai-Kia. 

Below is a link to a Mark Bursa feature on the subject.

Mark's just back from a trip to Malaysia and China and has been telling me some stories today. We've got some exclusive material for just-auto cooking in the oven. On a non-automotive note, the Mag-Lev train that links Shanghai Airport with Shanghai's city centre certainly sounds impressive (Siemens did that one, I think). It's a seven minute ride, topping 430km/h. The times they ain't a changin' any more. They've changed!

EMERGING MARKETS ANALYSIS: Rosoboronexport deal suggests GM and AvtoVAZ will go their separate ways


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