As you enter the main lobby of AvtoVAZ’s impressive 24-storey head office building, you’re confronted with a row of giant, life-sized portraits of stern-faced men. They’re painted in an extraordinary Soviet ‘socialist-realist’ style – even the more recent ones. Epic paintings of Very Important Men.
These are the past chairmen of AvtoVAZ; the men who built the business, and the men who kept it afloat as Russia transitioned from Socialism to Oligarchy. Among them is the instantly recognisable burly frame of Vladimir Kadannikov, the man who steered the company through the turmoil of the 1990s. His portrait shows a man of stature, standing next to a Samara car in front of the AvtoVAZ HQ tower. Smoking a fag.
Yann Vincent hasn’t sat for his portrait yet, but as the senior Renault executive tasked with modernising AvtoVAZ, he’ll surely be up there too, if he pulls off the task of turning round Russia’s biggest automaker. Vincent is AvtoVAZ executive vice-president of operations, and he knows just how big a task modernising the plant will be. “It’s the size of four Cleon plants, or 10 Douais,” he says, referring to Renault’s two biggest French factories.
But what AvtoVAZ needs more urgently is new product. In 2007, Togliatti still churned out an impressive total of 902,000 cars – 736,000 CBU and 166,000 CKD kits for assembly in Algeria, Egypt, Kazakhstan and another Russian plant, IzhAvto, which is now owned by AvtoVAZ and which also produces Kias.
Apart from the Kalina small car, the newest Lada design is more than 20 years old. The company still makes both the 1980s Samara and the 1990s 110 model. And still rolling off the line is the car that is unmistakeably the same Fiat 124 that launched the Lada brand 38 years ago. It’s had a few facelifts, but the 2107 ‘Zhiguli’ is still going strong, and still sells well.
This is because of its price of around €4,000 in Russia, something no modern low-cost model can match. “We want to keep producing this car, and the Samara, for as long as possible,” says Vincent. But despite this, the end is nigh for the Zhiguli. It looks likely that Russia’s move to Euro 4 emissions standards, scheduled for 2011, will spell the end; current Zhigulis can’t do any better than Euro 3, and Vincent doesn’t believe re-engineering the old model yet again is an option. “It’s never been so close to the end for the classic Lada,” he says.
The quickest fix is to introduce versions of cars based on the Logan platform, and next year AvtoVAZ will get Lada-badged and lightly restyled versions of the Logan MCV and van models. These Logan derivatives are not built as Renaults at the French automaker’s other Russian plant, Avtoframos in Moscow, and they won’t be in future. Nor will any other recognisable Logan or Sandero derivatives be made at AvtoVAZ.
This gives AvtoVAZ product in market segments it’s not present – panel vans and MPVs. But even the low-cost Logan can’t be sold at €4,000. Getting down to that level will require some clever re-engineering of an existing Lada model. “We’re planning to take one of the existing platforms – either Samara or Kalina – and decontent the platform,” says Vincent. This would enable AvtoVAZ to produce a new Lada price-leader with a sticker price of somewhere between €4,000 and €5,000.
Lada’s current best-seller is the 110 series, designed in the mid-1980s but not produced until the late 1990s. Two generations of 110 are built – the original 111 estate and 112 hatch are made, alongside the facelifted 2170 models, now called Priora, and available in hatch and sedan body styles.
Priora makes a decent job of upgrading an old car, but replacing it is almost as urgent a task as replacing the Zhiguli. The good news for Renault is that AvtoVAZ has already done a lot of work on the replacement, a new family of models, based on the new Lada C platform.
We’ve seen cars based on this platform at motor shows, and fully engineered five-door hatchback prototypes were on show during our visit. This even has an official Lada number – 2116. “We looked at either keeping this model or switching to a 100% Renault platform, but the best choice was to add Renault parts to the C platform,” says Vincent.
So once it’s been re-engineered around Renault engines, the 2116 will be ready to roll. It’ll be positioned towards the top of the C segment too. “It will go above the Priora and will compete with the Ford Focus,” says Vincent, confidently. As well as engines, Renault is looking to raid its own parts bin for anything that might speed the car into production – parts such as radiators, or central locking systems indeed “anything that does not change the philosophy of the car”, are likely to be Renault-related. This process has already started – “The earlier the better,” says Vincent.
A sporty three-door version was shown at the 2007 Geneva show, while a five-door, four-wheel drive crossover SUV on the same platform will be shown at an event in St Petersburg in a few weeks’ time. Clearly, much of AvtoVAZ’s future stands or falls on the success of the C platform.
Further down the line, a B-segment car will be developed to replace the Kalina. This will use the Renault X90 platform, says AvtoVAZ design centre director Maxim Nagayatsev. “We’ll use a Renault platform as it is more advanced in a technological sense.” This will use much of the Logan’s underpinnings, but with totally different bodies, styled in Russia by AvtoVAZ. It’s likely to be built in big numbers – Nagayatsev talks of “300-400,000 units”.
For the future, Vincent believes AvtoVAZ’s current capacity of around 1m units could be stretched. “The objective is to build 1.2m by 2013,” he says. This will be achieved largely through eliminating bottlenecks, largely in the foundry and stamping operations. The maths is simple, Vincent explains. The four lines at the plant can each produce 60 car per hour. Running for 5,000 hours per year, each line can build 300,000 cars a year – giving a total of 1.2m. In the longer term, further productivity improvements could stretch that to 1.5m.
The most urgent requirement of all is new engines. VAZ needs to fit cleaner powerplants; the C-series in particular requires a Euro 4 engine before it’s launched. So AvtoVAZ has licensed a range of Renault 1.4 and 1.6-litre gasoline engines, which it plans to build at a rate of 450,000 units a year in a new engine facility at Togliatti. These will be exclusively for AvtoVAZ. “We don’t intend to produce engines in Russia for Avtoframos.” Vincent says.
Vincent sees potential for growth in a number of areas – 4x4s and sports cars, for example. Lada still builds versions of the old Niva 4×4, though it can no longer use the Niva name, as that was sold to GM as part of the Chevrolet Niva project. This has “very limited impact on Lada”, says Vincent. Renault is now effectively an arm’s length 12.5% shareholder in the JV, but it has no involvement in the project.
The other major area for development is purchasing. Vincent wants AvtoVAZ to buy in to the Alliance’s Renault-Nissan Purchasing Organisation (RNPO). This isn’t easy when so much is made in-house. “We need to develop our suppliers’ performance,” says Vincent. He intends to “point them towards JVs with global Tier 1 suppliers” in a bid to improve quality.
Renault took the press to Pitesti a few months after it completed the Dacia takeover. And it took us back seven years later to show us the massive changes that had taken place. Roll on 2015, and the return Togliatti. And let’s hope Yann Vincent has earned his portrait.
Mark ‘Coolbear’ Bursa