Russian AvtoVAZ to suspend production after drop in Lada car sales
Russian car manufacturer AvtoVAZ plans to temporarily halt production this spring. Employees will be sent on corporate leave from May 4 to 13, and taking into account Russia's traditional long holidays, the conveyor belt will effectively stop already on May 2, writes The Moscow Times.
Photo: TASS
Officially, the company explains the suspension of production by modernizing manufacturing and preparing for the release of a new model — the Lada Azimut crossover. Work will also be carried out on the line where the Lada Niva SUV is produced.
However, dealers claim that the real reason is low demand and overflowing warehouses. According to certain information, the downtime could even extend until mid-May. In this way, the company is trying to avoid switching to a shortened work week, as KAMAZ has already done due to falling sales.
Although the car market in Russia slightly revived in March, the Lada brand showed weaker results than others. Its sales barely grew compared to last year, and even decreased in the first quarter. At the same time, competitors, especially Chinese brands, are significantly increasing sales.
Experts note that demand in March partially increased due to an early spring and buyers' desire to buy cars at old prices. But overall, forecasts are restrained — it is expected that the market will weaken again in the coming months.
The main problem for AvtoVAZ is that its new models are becoming more expensive and already compete with more modern Chinese cars. As a result, some buyers prefer either foreign brands or used cars.
Despite the fact that the share of Russian-assembled cars in the Russian market has significantly increased, the main benefit from this is not received by Lada models, but by other manufacturers.
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