AvtoVAZ plans to cut Lada production in next 3 months

Article by Andrew Christian, on August 27, 2014

AvtoVAZ is planning to trim output of its Lada cars in the next three months by 25,000 units due to dropping demand for new vehicles in Russia. According to AvtoVAZ, it built 47,100 Ladas and 12,100 Renault and Nissan vehicles in July. The company is controlled by the Renault-Nissan alliance.

The Russian carmaker saw sales of Lada vehicles drop 16 percent in the first seven months of 2014 to 220,822 units, according to data from the Moscow-based Association of European Businesses (AEB). The carmaker remarked in a statement that its workers would still receive their full salaries in the next three months.

AvtoVAZ is not alone in making the move. General Motors recently announced that it would cut production at its factory near St. Petersburg and was reviewing its expansion plans in Russia.

Auto sales in the country have so far been slumping, no thanks to a slower economic growth that has prompted consumers to postpone or cancel large purchases. Likewise, consumer sentiment came under more pressure due to Western sanctions imposed against Russia over the crisis in Ukraine.

In July, auto sales in the country dropped 23 percent year-on-year following a 17-percent fall in June, according to AEB data. Lada saw its sales dip 25 percent to 28,014 in July, AEB figures show. AvtoVAZ built 438,400 Ladas and 20,800 Renault and Nissan cars in 2013.

It also produced 213,700 Ladas and 51,800 Renault and Nissan cars, according to ASM-Holding. [source: themoscowtimes.com]

Topics: avtovaz, lada, production

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