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Avtovaz, the maker of the Lada, is thinking of switching to a four-day workweek amid poor sales.
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It accused foreign car firms of “price dumping,” and projected earlier that 2025 sales would fall 25%.
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But Russians are also buying fewer cars overall, down 27.6% in June year-on-year.
Avtovaz, the firm that manufactures Russia’s best-selling car brand, said on Tuesday that it may shift to a four-day workweek amid forecasts of plummeting sales for this year.
The state-owned automaker told Russian state media it was fighting multiple headwinds, including Chinese car brands surging into the local market.
So it’s considering introducing the downsized workweek in the fall, starting on September 29.
“At the same time, the company emphasizes that the final decision on the introduction of a partial four-day workweek will be made based on the results of an analysis of market trends and economic factors, including the level of the key rate and the availability of credit products,” Avtovaz said in a statement to Russian media.
The firm makes the Lada, the Soviet Union’s most widely produced family of cars, and a symbol of Russia’s Cold War era. The Lada continues to be the most common car in the country.
Avtovaz has previously reduced factory work days. It last introduced a temporary four-day workweek for three months in 2022, as the onset of the Ukraine war prompted foreign industries to leave Russia.
Now, it’s telling state media that its sales were hit hard by tightening car loan rules and high interest rates — debt-averse measures that Moscow imposed amid the West’s sanctions.
China’s cars hit Lada hard
But this time, the company also blamed the heavy import of foreign cars in 2024. With almost all international car brands ceasing official sales in Russia after the Ukraine war began, foreign sales there are dominated by Chinese automakers.
Chinese car brands sold over 1 million vehicles in Russia in 2024, a sevenfold increase from the previous year.
In its statement, Avtovaz accused imported brands of “pursuing a policy of price dumping,” saying that these rivals’ warehouses hold over 400,000 unsold cars.
And the Russian carmaker thinks its revenues will continue to suffer. Avotvaz said last month that it expected its car sales to drop 25% to 1.1 million vehicles in 2025 compared to last year.
That’s amid an overall drop in car sales across Russia. The local auto analysis firm Autostat said on July 4 that 90,116 new passenger cars were sold in June, down 27.6% from the same month last year.
Despite its challenges, Avtovaz holds the largest share in the domestic market, selling just over a quarter of those cars in June.
Avtovaz and Solaris, a new local car company that operates an old Hyundai plant in St. Petersburg, are the only two Russian companies in the country’s top 10 passenger car firms by sales.
Another seven of the top 10 are Chinese firms, while one is Belarusian.
Read the original article on Business Insider
