Former Nissan plant in St. Petersburg starts assembling Lada cars

ST. PETERSBURG. June 19 (Interfax) - Avtovaz has started to assemble Lada brand cars at the Lada St. Petersburg plant, formerly operated by Nissan, which has left Russia, an Interfax correspondent reported.

Production was launched on Saturday, the final day of the 2023 St. Petersburg International Economic Forum. Deputy Prime Minister - Ministry of Industry and Trade of Denis Manturov, President of Avtovaz Maxim Sokolov and Governor of St. Petersburg Alexander Beglov attended the launch ceremony,

The first car to come off the new line was the front-wheel drive Lada X-Cross 5 crossover with a 160hp turbo engine and seven-speed automatic transmission.

At the initial stage, the car is being assembled as an SKD model based on the technologies of an eastern partner of Avtovaz which the company is not officially naming, however press reports and specialized Telegram channels say this is the FAW concern, and the new Lada is based on the FAW Bestune T77 model.

"It took three months to prepare for production. We decided to put the model straight onto a serial assembly line, unlike other plants. This will allow us transition to full-cycle car production quickly in the future," the Lada plant's executive director Sergei Zakharchenko told reporters.

He said the plant now had 1,500 employees, compared with 2,200 when it was run by Nissan.

The Nissan plant had operated since 2009. Initial investments were $200 million, followed by 167 million euros in expansion. The plant, capacity of 100,000 vehicles, produced X-Trail, Murano, Qashqai and Terrano models.

Nissan in late October announced a decision to transfer its Russian assets, including the plant, production and research facilities in St. Petersburg, as well as the sales and marketing center in Moscow to the ownership of the federal state unitary enterprise NAMI, which reports to the Industry and Trade Ministry. The transaction was concluded for a symbolic price. It envisages an option to buy the assets back within six years.

NAMI, which currently owns Avtovaz, later handed a 99% stake in the St. Petersburg plant directly to the company.

"We plan to assemble 10,000 cars [in St. Petersburg] by the end of this year. If there is an opportunity for more, we will assemble more. Next year we plan to increase production 30,000-35,000, depending on the market and opportunities to expand the portfolio, and to reach 50,000 or a little higher by 2025. Then everything will depend on how our market behaves in terms of recovery," Maxim Sokolov told reporters on the sidelines of the forum.

The company's overall production target this year is 401,600 cars,

Avtovaz produces the Lada Granta, relaunched in June 2022, the Lada Niva Legend since the middle of July 2022 and Lada Niva Travel since the middle of August 2022 at its Togliatti site. Serial production of the new generation Lada Vesta also started there in March this year Production of the Lada Largus should resume in September. Pilot production of the e-Largus model is planned in Izhevsk for the end of the year.