Blog: Dave LeggettOh AvtoVAZ, what is to become of you?

Dave Leggett | 8 February 2006

What does the future hold for Russia’s behemoth of a car company AvtoVAZ, I wonder? The company is under pressure at home as foreign makes take a larger slice of the Russian market and its products are undeniably poor when benchmarked against international auto industry standards. Will it limp on as it is? Hard to see the company looking attractive to any potential partner.

GM wouldn’t go near any wider involvement than its Niva SUV JV, even if it could find the spare cash. Could a Chinese company come in as a partner? But there again, why would they? AvtoVAZ technology isn’t exactly something to covet.

There are plenty of market entry case studies for Russia now that are based on Greenfield facilities; there’s no need to buy existing (and creaking) capacity and inherit all the problems that go with it.

However, I don’t see Putin – or his successor - letting the company disappear either.

I see the company still indulges in the practice of issuing rather fanciful statements about its bright future on the back of a wave of new products being planned. Past experience would suggest a pretty wide divergence between plans and reality.

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