Blog: Russia's car industry at a crossroads
Dave Leggett | 6 October 2003
As the local market starts to fragment with new players taking more share, there are some uncomfortable questions for local giant AvtoVAZ. The big question facing the Russian car industry and market is how it may restructure and modernise in the future. AvtoVAZ has made it clear that it is looking for a strategic partner to help it to modernise and become more competitive. GM has a JV with AvtoVAZ (Chevy Niva) and could conceivably step up its involvement in the future, but GM's management is likely to be wary. If AvtoVAZ does not modernise, it may seek greater government financial help and protection from competition. But how do you change a plant like Togliatti and an ingrained company culture like that which exists at AvtoVAZ? Answer: with great difficulty. Who'd want to partner with that can of worms if there's an easier alternative strategy for breaking into Russia? Russia's car industry is at a crossroads.
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