Page 134 - RusRPTAug22

Germany to raise awareness of the risks sanctions pose to Russian jobs, the chairman of the company’s Workers’ Council told bne IntelliNews that “If you include the families of the workers then the knock-on effects will affect the whole population of Nizhny Novgorod.” Nizhny Novgorod is one of Russia’s largest industrial towns. It is not the only place dependent on car manufacturing, though. Nearby Togliatti and Izhevsk are also vulnerable, with big plants in both cities.
Further west, the town of Kaluga boasts three plants, where Volkswagen, Volvos and Peugeot are made. Peugeot may soon open its assembly plant up to other carmakers in order to reduce costs.
The St Petersburg area also has a cluster of car plants, most notably the Hyundai plant, the second largest in the country. Other plants are scattered across Russia, including Vladivostok, Kaliningrad, and Yaroslavl.
Some towns, such as Nizhny Novgorod and Izhevsk, boast a host of other industrial producers, so their local populations are less exposed to the risk of job losses.
In an attempt to stir up patriotic demand, Moscow’s mayor Sergei Sobyanin announced plans to re-launch the popular Soviet brand “Moskvitch” (Muscovite) at AvtoVaz.
The Russian government apparently hoped to secure the support of Chinese state-owned carmaker Anhui Jianghuai Automobile Co. (JAC) to provide parts and designs for the new Moskvitch models, but there have been no signs that it was successful in this endeavour.
According to reports, no designer has been engaged and at the end of July the Financial Times reported that Chinese investment into Russia has fallen to zero.
However, AvtoVaz has successfully revived the classic three-door Lada Niva Legend, which is now priced at $13,600.
AvtoVaz CEO and former minister of transportation Maxim Sokolov, who has vowed that 95% of the Lada Niva’s components will eventually be domestically manufactured, said: “Production resumption of the second Lada model and the launch of another assembly line in the current difficult conditions is a real victory for the entire AvtoVaz team ... The company is going on to make every effort to resume production of all cars of the Lada line-up, actively working with suppliers from Russia and friendly countries.” Reduced visibility ahead For all the triumphalist rhetoric, though, it is unclear how much longer Russia’s car industry can stagger on with a critical shortage of foreign-supplied parts, which it depends on for at least 50% of its manufacturing.
134 RUSSIA Country Report October 2020 www.intellinews.com