Avtovaz informed on Tuesday that it can shorten the working week from five days to four, which is a unique move in the case of a large state employer. High interest rates and competition from China, which negatively affect sales, force him to do so. There is a problem with finding a sufficient number of potential car buyers, because the loans are getting more and more expensive, the costs of car production are rising, and with them their prices. “We are talking about a high interest rate and sharper regulator's requirements for borrowers in the field of car loans,” informs Avtovaz in a statement cited by Reuters.
See also: The breakdown of the automotive market in Russia. The salons close one by one. “Very difficult situation”
Russia. This is another crisis at Avtovaz
The company also emphasizes the problem with growing competition, informing about a large number of cars from abroad that flood the Russian market, and whose producers apply “price dumping policy”. As Reuters reminds, China is currently responsible for 50 percent. The car market in Russia, while before the invasion of Ukraine it was less than 10 percent.
Avtovaz currently employs over 30,000 people, mainly in Togliatti on the Volga, located about 800 km southeast of Moscow. Sales dropped by 25 percent. (up to 155,481 pieces) in the first half of this year.
See also: What is falling in Russia? The automotive sector is devastated, and this is the tip of the iceberg
The company experienced the first serious collapse in 2022 after the Western states were imposed by Russia's invasion of Ukraine. Sales of Lada then dropped by as much as 48 percent, and the production was slowed down by a deficiency of components from abroad. The manufacturer then shortened the work week for three months, later his activity returned to the relative norm. Now Avtovaz announces the same move, but he has not made the final decision yet.
