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Russian car manufacturer cuts production as market slumps

October 02, 2014, 13:08 UTC+3 SAMARA
The GM-AVTOVAZ joint venture in Russia's Togliatti, the Samara Region, which manufactures Chevrolet NIVA four-wheel drives, is going to slow down the assembly line as of October 6
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Chevrolet NIVA four-wheel drives

Chevrolet NIVA four-wheel drives

© ITAR-TASS/Vladimir Zinin

SAMARA, October 1. /TASS/. The GM-AVTOVAZ joint venture in Russia's Togliatti, the Samara Region, which manufactures Chevrolet NIVA four-wheel drives, is going to slow down the assembly line as of October 6. The reason to follow in the footsteps of other automobile manufacturers to reduce production is due to the slump on the country’s automobile market, GM-AVTOVAZ press-service said Thursday.

This week the car plant paused production altogether to readjust its workshops to a new mode of operation.

“GM-AVTOVAZ is in the process of rebalancing the assembly line to prepare for a slowdown. Starting from October 6 the assembly line will be working two shifts five days a week,” the press-service said.

Russia's biggest car manufacturer starts layoffs campaign

Russia’s automotive industry leader AvtoVAZ in September launched a layoffs campaign.

At the end of December 2013 AvtoVAZ had a workforce of 65,800 (including 50.6% of blue collar workers). Toward the end of 2014 the personnel is expected to shrink to 53,000. The current personnel optimization is expected to slash costs.

Car market slump

According to the Association of European Businesses Russia’s automotive market slumped 12.1% in January-August 2014. A total of 1,582 million new cars were sold in that time - 217,000 less than in January-August 2013. The production of cars reduced by 4.6% in contrast to the same period last year to 1.2 million. The sales of AvtoVAZ’s Lada cars plummeted by 32% in August in annual terms.

Russia’s other automobile manufacturers have been reducing personnel, too. The General Motors plant in St. Petersburg will be working one shift a day instead of three as of October 1. Ford in Vsevolzhsk, the Leningrad Region, and Volkswagen, in the Kaluga Region, too, have declared they will be working shorter hours.

There has been a slump in the market of many popular makes and models. In August alone Chevrolet sales were down by 50%, Ford, by 57%, Daewoo, by 58%, Suzuki, by 58% and Peugeot and Geely, by 56%

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