Russian automaker AvtoVAZ is to axe a further 7,000 staff at its Togliatti plant in the Samara region, although insists the redundancies will not be compulsory.
The manufacturer – which is 25% owned by Renault – has revealed the job cuts representing around 10% of its current headcount – on top of a 30,000 reduction in staff last year.
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Such a large fall in employee numbers however, is a legacy of the manner in which many Russian companies used to operate, being responsible for a significant number of ancillary services such as schools and hospitals.
“With the modernisation of AvtoVAZ things are changing,” a Renault spokeswoman in Paris told just-auto. “There would be around 7,000 from now until 2011 who would leave the company but it is not compulsory.
“Most of them would be people looking after security or cleaning – this is not core business – they will still work for AvtoVAZ but not be AvtoVAZ employees. Renault and AvtoVAZ’s objectives are quite simple – to modernise AvtoVAZ.”
Renault also highlighted the need to modernise the supply base in Russia in what is fast becoming a key market for the French manufacturer, despite the country’s economic challenges in 2009 in particular.
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By GlobalData“The crisis was large but the situation is improving [and] to be strong in Russia it is important to produce locally and for that we have to improve the supply base,” said the spokeswoman.
To that end Renault has been in discussion with the Russian government as to how it might achieve better supply operations.
“It is too early to say exactly what [improvements] but the idea is to find the best way for constructors to help local suppliers develop themselves,” said the spokeswoman.
AvtoVAZ, together with its Renault and Nissan partners, had a 37.8% market share in Russia at the end of last month, benefiting from the country’s scrappage scheme.
The partners have three plants in Russia – Togliatti, Moscow and St Petersburg with a production capacity of 1.3m units by 2012.
