Avtovaz guidance for suppliers sees production growing 16% to 500,000 cars in 2023

MOSCOW. June 24 (Interfax) - Avtovaz , Russia's leading carmaker has told its suppliers that it expects to increase production by about 16% to 500,000 vehicles in 2023 from 430,000 in 2021.

The production guidance for next year was announced by the chairman of the Ulyanovsk regional government, Vladimir Razumkov at a conference of Avtovaz suppliers held in Togliatti on Thursday. He indicated that auto component manufacturers in the city of Dimitrovgrad are prepared to increase production and preserve jobs.

"Basically, we heard a fairly clear signal now that 2023 means production of 500,000 automobiles. Production of the traditional platform has now resumed. Therefore, those of our manufacturers who work with Avtovaz received a clear signal, accordingly they are now also starting production and deliveries of components to Avtovaz. And, subsequently, we understand that going forward there will be a new platform," Razumkov told reporters after the conference.

Avtovaz president Maxim Sokolov also mentioned the prospects of building automobiles on the company's own platform.

"We intend to expand the line of produced models. The Niva literally starting next month, then perhaps the Largus, and in the medium-term future the Vesta, as circumstances allow. We are intent on future development of new automobile models, on our own platform, of course," Sokolov told reporters.

Sokolov said in an interview with RBC at the recent St. Petersburg International Economic Forum that Avtovaz produced slightly more than 430,000 vehicles last year. "Our strategy includes increasing production capabilities to 800,000 automobiles per year, maybe even more, so we'll be working hard for a couple of years," he said.

Avtovaz production has been hampered by shortages of semiconductors since the middle of last year. This problem has worsened dramatically since the end of February, when Russia began its military operation in Ukraine and France's Renault Group transferred control of Avtovaz to state company NAMI.

Avtovaz is now working a four-day week and plans to continue to do so until September 4. The company's plant in Togliatti is partly idle; out of the three lines of its integrated assembly facilities, only a line assembling simplified versions of the Lada Granta is operating. The other two lines are idling: B0, which produced the Lada Largus and Lada Xray, Renault Logan and Renault Sandero; and the Niva line, which the company plans to start up in July. Production of the Vesta in Izhevsk has also not restarted.

Avtovaz's sales tumbled almost 60% to 67,200 cars in the first five months of 2022, the Association of European Businesses reported. The company's market share shrank by 3 percentage points to 21.1%.

Avtovaz sold 350,700 Lada cars in Russia in 2021, 2.1% more than a year earlier, and exported about another 36,000 vehicles, the company reported.

With Renault having left Russia, Avtovaz is now 67.7% owned by NAMI and 32.3% by state corporation Rostec, which control the automaker through Lada Auto Holding LLC.