AvtoVAZ says it is aiming for annual production of 1m cars by 2017, although it adds it is likely to need a new series of models to do so.
The automaker will be aided considerably by the announcement of an injection of US$742m from the Renault-Nissan alliance into a joint venture with Russian Technologies State Corporation, that will give the French and Japanese partners an eventual 74.5% stake in AvtoVAZ by mid-2014.
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“By 2017 we aim to produce 1m cars, to get that goal we need new models,” AvtoVAZ executive vice president Oleg Lobanov said at last week’s Russian Automotive Forum organised by Adam Smith Conferences in Moscow.
“Three new families [of cars] – in three years – that is almost the limit of what is possible.”
AvtoVAZ sales rose 0.5% year on year to nearly 44,000 units in February and although this only includes numbers for Lada, Lobanov stressed the importance of the iconic brand to the manufacturer’s health.
“People buy Ladas because they like our cars as they become more advanced and safe,” he said.
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By GlobalDataLada passenger cars include the Granta, Kalina, Priora, Largus, Samara and some limited, customised models.
The EVP also highlighted how – unspecified – government support had aided AvtoVAZ in weathering the plunging economic climate of a few years ago to become one of Russia’s heavyweight employers.
“The crisis showed if the government [did] not support us, a domino effect could have started and it is true, [it was on] the speed of change that the survival of AvtoVAZ depended,” he said. “We created a new model of functioning.
“The share of market was almost 20% in 2012 – we are a huge employer. We now co-operate better with universities and also with higher eduction institutions all over the country.
“AvtoVAZ is part of Russia and we are dependent on other parts of Russia.”
Reports from Russia this morning (17 April) are also speculating a significant portion of AvtoVAZ’s profit may be marooned in Cyprus, whose tiny island’s economy recently took centre stage with uncertainty surrounding the future of the Euro currency.
Cyprus may look to recoup some of the finance it needs to secure a Euro Member States loan by levying a tax on depositors, a number of whom are apparently Russian, although no precise details are yet available if and when this will occur.
Avtovaz posted net profit of RUB29.18bn (US$921m) for 2012 – 4.4 times greater than its profit for the previous year.
However, most of the profit was attributed to the depreciation of interest-free loans amounting to RUB27.6bn.
AvtoVAZ in Russia was not immediately available to comment on any Cyprus developments.
