Moscow analysts maintain despite AvtoVAZ CEO, Bo Andersson’s dramatic departure this week, the former chief of one of Russia’s largest companies had achieved some notable milestones, particularly in the supply chain.
A brief statement from AvtoVAZ shareholders, Alliance [Renault-Nissan] Rostec Auto, sent to just-auto from Paris, simply noted: “Bo Andersson, CEO of AvtoVAZ, plans to step down from the Russian automaker.”
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“An AvtoVAZ Board of Directors’ meeting is scheduled for 15 March, at which time Andersson’s replacement is expected to be announced.”
It seems Andersson was unable to swim against the tide of Russia’s almost constant monthly vehicle sales falls, which have provided gloomy reading for the past year, but he nonetheless managed to address supply chain issues and launch new models to international approval.
There have been suggestions in certain quarters Andersson had made himself unpopular by taking the axe to a significant swathe of AvtoVAZ’s significant headcount, but one Moscow-based analyst insists the move was the right thing to do.
“He [Andersson] continued downsizing the company, which we agree [was] a necessary step, EURussia managing partner, Ivan Bonchev told just-auto from the Russian capital. “It is definitely one of the factors [about which people have expressed opinion], which has made certain groups of people unhappy.
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By GlobalData“He has had some significant achievements. Objectively, at this point of him being released, you would not say he has negatively performed against all KPIs and he has managed to stir the culture at AvtoVAZ in a very positive way.
“Nevertheless, in the first place, he did not meet his KPIs and whoever is [measured] against KPIs, the task has not been performed.”
The Moscow analyst praised however, Andersson’s willingness to tackle the quality of some of Russia’s supplier base, insisting on raising standards, given his history as purchasing manager at General Motors.
This may or not have raised hackles with some in the supply chain, but Russia is almost uniquely poised to take advantage of a rock bottom rouble, which has swiftly made domestic component manufacturers extremely competitive.
“Another positive aspect I would assess has been he has replaced certain so-called quasi-Russian suppliers that have repacked Chinese supplier parts …and label it as Made in Russia,” added Bonchev.
“Of course, Andersson is very experienced in terms of purchasing. I am pretty sure he has made strong efforts to change the supply chain.
“It is supply issues rather than downsizing, but of course in the first place it is the economic KPIs.”
The Togliatti-based Lada manufacturer recently posted a 2015 operating loss of RUB24.7bn (US$351m) compared to RUB10bn in 2014, while it has also introduced a four-day working week as Russia continues to endure enormous economic challenges.
An indication of how tough conditions are in Russia is also illustrated by AvtoVAZ Group revenue down 8% at RUB176.5bn, set against a market backdrop plunge of 36%.
AvtoVAZ production volume of Lada, Renault, Nissan and Datsun brands, including CKD kits, amounted to 469,000 units, down 19%.
