Russia’s Greatest Carmaker Eyes 4-Day Workweek As Gross sales Plummet

Avtovaz, the agency that manufactures Russia’s best-selling automobile model, mentioned on Tuesday that it could shift to a four-day workweek amid forecasts of plummeting gross sales for this yr.

The state-owned automaker instructed Russian state media it was combating a number of headwinds, together with Chinese language automobile manufacturers surging into the native market.

So it is contemplating introducing the downsized workweek within the fall, beginning on September 29.

“On the similar time, the corporate emphasizes that the ultimate determination on the introduction of a partial four-day workweek will likely be made primarily based on the outcomes of an evaluation of market traits and financial components, together with the extent of the important thing fee and the provision of credit score merchandise,” Avtovaz mentioned in an announcement to Russian media.

The agency makes the Lada, the Soviet Union’s most generally produced household of automobiles, and an emblem of Russia’s Chilly Conflict period. The Lada continues to be the most typical automobile within the nation.

Avtovaz has beforehand decreased manufacturing unit work days. It final launched a short lived four-day workweek for 3 months in 2022, because the onset of the Ukraine conflict prompted international industries to depart Russia.

Now, it is telling state media that its gross sales have been hit laborious by tightening automobile mortgage guidelines and excessive rates of interest — debt-averse measures that Moscow imposed amid the West’s sanctions.

China’s automobiles hit Lada laborious

However this time, the corporate additionally blamed the heavy import of international automobiles in 2024. With nearly all worldwide automobile manufacturers ceasing official gross sales in Russia after the Ukraine conflict started, international gross sales there are dominated by Chinese language automakers.

Chinese language automobile manufacturers offered over 1 million autos in Russia in 2024, a sevenfold improve from the earlier yr.

In its assertion, Avtovaz accused imported manufacturers of “pursuing a coverage of value dumping,” saying that these rivals’ warehouses maintain over 400,000 unsold automobiles.

And the Russian carmaker thinks its revenues will proceed to undergo. Avotvaz mentioned final month that it anticipated its automobile gross sales to drop 25% to 1.1 million autos in 2025 in comparison with final yr.

That is amid an general drop in automobile gross sales throughout Russia. The native auto evaluation agency Autostat mentioned on July 4 that 90,116 new passenger automobiles have been offered in June, down 27.6% from the identical month final yr.

Regardless of its challenges, Avtovaz holds the most important share within the home market, promoting simply over 1 / 4 of these automobiles in June.

Avtovaz and Solaris, a brand new native automobile firm that operates an outdated Hyundai plant in St. Petersburg, are the one two Russian firms within the nation’s high 10 passenger automobile corporations by gross sales.

One other seven of the highest 10 are Chinese language corporations, whereas one is Belarusian.