Russian President Vladimir Putin (left), chairman of board of AutoVAZ " Vladimir Artyakov (second left), general director of Rosoboronexport Sergey Chemezov (center) and Russia Minister of Economic Development and Trade German Gref
Photo: Dmitry Azarov
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AvtoVAZ Cuts Back Production
AvtoVAZ will reduce its production of vehicles and vehicle sets by 6.6 percent and 12.7 percent, respectively, this year. The plant explained that the move is a reaction to the market and the desire to refit assembly lines with new equipment. Dealers note that the change comes simultaneously with the slow sales season and will give them a chance to sell off their backlog.
The plant's board of directors decided to cut back 2007 production goals in its first gathering after the May 26 annual stockholders meeting. AvtoVAZ Group president Vladimir Artyakov issued an order reducing vehicle production from 771,600 to 720,600 and vehicle set production from 188,100 to 164,100 by the end of the year. The plant's press service has confirmed these changes.
Analysts point out that AvtoVAZ is losing its competitive advantage in the economy class and say that the planned upgrade is well times. Various estimates place the stock on hand with dealers at 90,000 to 130,000 vehicles, while the plants production has been keeping pace with sales.
“The expected spike in sales that we were all waiting for this spring didn't come,” Krumb Service sales director Mikhail Gulya noted. He added that the production slowdown and the lowering of the suggested price on Lada Kalina and Lada Samara, sales of which “have especially fallen,” by 5.5 percent compliment each other. AvtoVAZ promised dealers a 7-percent premium on sales of those cars to make up for the lost profit margin.
www.kommersant.com
All the Article in Russian as of June 04, 2007
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