Russian media sources report that AvtoVAZ has resumed car production after a two-week hiatus designed to reduce stock levels.
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However, it is reported also that worries over excessive stock remain. Yury Zektser, head of AvtoVAZ’s Moscow representative office, told Interfax that whilst oversupply has now eased, it has not eased ‘by as much as we had hoped’.
AvtoVAZ shut down its assembly line in October after discovering that some 75,000 cars (representing 28 days of production) were sitting in warehouses and at dealerships around the country.
AvtoVAZ forecasts that it will produce 747,000 cars in 2002, against original plans for 770,000 units.
Media reports speculate that the assembly line may be stopped again in December.
Analysts note that the AvtoVAZ brands are experiencing tougher competition from imports in the Russian market this year. Although local brands are generally substantially cheaper than imports, foreign car brands are up 20%-60% this year in response to rising incomes and the increased availability of consumer credit.
