26 November 2002 16:17
RUSSIA: AVTOVAZ STOPPAGES ILLUSTRATE INDUSTRY WOES
After failing to ease an overproduction crisis with a 26 October-10 November stoppage, automaker AvtoVAZ will halt
production again from 15 December to 15 January, "Kommersant" reported on 22 November. Faced with slumping
demand and stiff competition from foreign carmakers, AvtoVAZ has not managed to make much of a dent in a production
surplus that could be as large as 90,000 cars. Dealers fret that the automaker has no long-term solutions beyond cooling
its conveyer belts. "The factory isn't doing anything to support sales," a LadaLend dealer complained to
"Kommersant." Meanwhile, foreign automakers are making every effort to win over Russian buyers. The major
players are Korea's Hyundai and Kia, German-owned Skoda, U.S.-based Ford, and France's Renault. All offer cars
in the $8,000-$12,000 range that boast higher quality than Russian equivalents and more flexible credit options for
buyers. According to a feature story in "Itogi" No. 46 on 19 November, Skoda's sales for the first nine
months of 2002 rose by 45 percent to 7,745, Renault's by 58 percent to 6,042, Kia's by 31 percent to 2,824,
and Hyundai's by more than 100 percent to 2,939. The absolute numbers remain small, but some feel the writing is on
the wall. In an illustration of the trend, Renault is gearing up to assemble its compact Symbol in Russia,
"Vedomosti" reported on 18 November. Initial production targets are a modest 20 cars a day. Renault joins
Ford, Hyundai, and Kia, which also have assembly facilities in Russia. DK Copyright (c) 2002. RFE/RL, Inc. Reprinted
with the permission of Radio Free Europe/Radio Liberty
[AIW [Asia Africa Intelligence Wire]] |
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