14 Mar 2023 14:44

Avtovaz to minimize debt as part of development strategy through 2030

MOSCOW. March 14 (Interfax) - The priority areas of Avtovaz's development strategy through 2030 are its dominant position in the Russian car market, export growth, and expansion of its product line, as well as import substitution and repayment of the significant loan obligations assumed by the company when French Renault was part of its management.

The main priorities of the company's updated development strategy through 2030 were approved at a meeting of the company's board of directors. The document is planned for completion at the end of 2023, Avtovaz's press service said.

"Our main goal for Development Strategy - 2030 is the maximum possible realism of the document under current conditions. Today, Avtovaz faces the most difficult challenges in the entire history of the company, and we are clearly aware of our responsibility to the team, our customers, partners and shareholders for the successful continuation of the work of our production sites," the Avtovaz press service said, quoting the company's president, Maxim Sokolov.

In order to strictly adhere to its strategic priorities, the company is counting on the continuation of state and regional industry support programs, he said.

Avtovaz intends to develop in five main areas in the coming years. The company plans to take the dominant position in the domestic market; develop export sales and increase the number of markets where Lada has a presence with the help of local and global partners; achieve technological sovereignty, primarily in critical technologies and components; and expand its product line, including through the development of its own platforms.

In addition, Avtovaz intends to "maintain the profitability of the business and achieve financial stability, including through the repayment of significant loan obligations issued during the period of the company's management by its foreign shareholder, Renault-Nissan Alliance," the press service said, without specifying any targets with regard to the debt. The goal is "minimizing the debt burden to comfortable values," the press service said. Sokolov told reporters in January that the total debt of Avtovaz to creditors in 2022 increased from about 100 billion rubles to 120 billion rubles. According to Avtovaz's 2022 RAS financial statements, the company's total debt exceeded 180 billion rubles, which was a 4% decrease YoY.

Avtovaz's development strategy through 2030 is in sync with the state strategy for the Russian auto industry approved by the government in December. The state's approach to the industry is based on the principles of satisfying the Russian market with cars produced with 80%-or-more localization, ensuring technological sovereignty, and increasing the share of the automotive industry in the country's overall GDP, as well as increasing the competitiveness of Russian products on the world market and developing exports.