AvtoVAZ CEO, Bo Andersson remains confident Russia’s relatively low car ownership still sees major potential for the country currently under the yoke of severe international economic sanctions.
Consumers in Russia are currently stalling in a significant way with new vehicle purchases as sky-high interest rates combine with steep inflation and a depreciating rouble to create market volatility.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The Russian passenger and light commercial market has plummeted consecutively for around a year, with forecasts the country could one day overtake Germany presently appearing well out of reach, but AvtoVAZ still remains optimistic given the low uptake and its new model range revamp currently under way.
“If you take the Russian Federation, we are around 240 cars per 1,000 and the rest of Europe is around 550,” said Andersson addressing delegates at the recent St Petersburg International Economic Forum in St Petersburg.
“I am optimistic people will buy more cars.”
Andersson also revealed the automaker spends seven times more money every day – RUB700m (US$13m) – on suppliers than it does on its own in-house costs while it also leverages the power of its Renault-Nissan alliance investment to produce their eponymous vehicles as well as Ladas and Datsuns.
“I am optimistic on the market,” added Andersson. “The good thing, for me, Russia is extremely difficult, but it is difficult for everyone. That is why I say I love to work here, it is challenging, but if you have the right focus, the right people, you will be successful.
[But] “We are still a long way from where we should be. Today the theme is how to integrate the total supply chain. I am not 100% sure what technology will come.”The AvtoVAZ chief also noted in the past year and a half, the automaker only had two recalls.
“That is a good thing,” said Andersson, adding: “Both of them were related to mechanical issues, so there is also an advantage to have less complexity in a car from a safety standpoint.”
