Avtovaz sets up leasing subsidiary, working on new commercial vehicle brand
MOSCOW. Jan 16 (Interfax) - The leasing company that Avtovaz and Promsvyazbank (PSB) set up at the beginning of this year, Eurasia Auto Finance will enable Russia's leading carmaker to increase sales of commercial vehicles, for which it is preparing to launch a new brand, Avtovaz president Maxim Sokolov said.
"In the period immediately after the New Year holidays, before the old New Year [January 14], a company was registered that will support our sales. This is a leasing company where Avtovaz is actively participating as a shareholder, together with our partner Promsvyazbank and our [captive] Auto Finance Bank - it is they who own shares in JSC LC Eurasia Auto Finance," Sokolov said at Avtovaz's annual press conference on Wednesday.
LC Eurasia Auto Finance was registered in Moscow on January 10 with charter capital of 125 million rubles, the Unified State Register of Legal Entities showed. The founders are not disclosed in the register.
"This company, even with today's high key rate, will enable our clients to use more flexible financial instruments. And I'm confident that sales of our commercial automobiles will increase significantly in 2025, in part thanks to the use of new leasing mechanisms," Sokolov said.
After the press conference, Sokolov also told reporters that Avtovaz is working on creating a new commercial vehicle brand under which it will sell its own existing commercial vehicles, such as the Lada Largus, and vehicles that might be developed with foreign partners.
"We'll see when we will already present the brand, if it comes to this, what model range to include in it. It's still premature to talk about this now. Work is underway, this work is in the final stage. The horizon is 2026," Sokolov said.
Avtovaz sees growing demand for commercial vehicles in Russia, he said.
"The segment is underutilized, which is why a special effort was made to launch the Largus as a successful product in Avtovaz's line. We invested in the development of our subsidiary VIS-Avto, which is located in Togliatti, but not within the perimeter of the main plant, next to it, to develop its product line, which is now produced at the plant on the base of the Lada Granta and Lada Niva, and to increase production," Sokolov said.
"During the New Year holidays, painting operations were fully launched, and this indicates that a complete cycle model can essentially be used there. In other words, we will no longer ship vehicle kits there, but just bodies. And our colleagues will paint them, and fully assemble into new automobiles. And it is this plant that will be geared exclusively toward commercial vehicles. And it will be possible to develop this line there. This is how it's going to be - it's a matter of 2025-2026," Sokolov said.
Asked about the size of the vehicles Avtovaz wants to produce under the new brand, he said a final decision has not been made yet, but it will not be heavy duty vehicles. "The core is the line that we have now. And it might be expanded with a separately operating enterprise and cooperation on the product line with our partners," Sokolov said.
He did not name Avtovaz's possible partner in the project. "We are working with many of our partners, both in the country and abroad," he said.
"Regarding partners in the country, I primarily mean engineering teams. You've probably seen that our engineering center in St. Petersburg, which works with many engineering companies and design centers, is fully up and running. We have a contract with the St. Petersburg Stieglitz State Academy of Art and Design regarding industrial design," Sokolov said.
"And developing not just the product line, but also variations of brands, is also one area of our company's marketing. Particularly since we see the successful example of the Chinese market, where brand variety rules. We're following these trends, so we're exploring the issue of launching another separate brand that will, among other things, characterize our line of commercial vehicles," Sokolov said.