AvtoVAZ

Country

Russia

Parent

Renault (France) - 67.1%

Subsidiaries

Brands

VAZ, Lada

Location

Headquarters and factory: Togliatti

Sales figures

Sales:
2017: 335,564 units
2016: 284,807 units
2015: 305,491 units
2014: 448,114 units
2013: 534,911 units
2012: 606,778 units
2011: 643,500 units
2010: 570,014 units
2009: 385,855 units
2008: 728,800 units
2007: 663,500 units
2006: 707,000 units

Production:
2005: 721,492 units
2004: 717,981 units
2003: 699,889 units
2002: 708,835 units
2001: 767,313 units

Introduction

AvtoVAZ was founded in 1966 as a state-owned company but it is now privatised. It is the largest car maker in Russia and being the only car maker there to export considerable amount to the West. In Europe, its cars are badged as "Lada". In home country, it is simply called as "VAZ".

Like most other Russian industrial products, the cars of AvtoVAZ are outdated in technology, styling, quality and simply everything. This is due to its lack of funds and international collaboration. As a result, Lada no longer sells well overseas, especially facing its stronger Korean rival. At home, however, it is still well protected by government policy, which make foreign competitors difficult to access the fast-growing Russian market. For this reason, Renault agreed to take 25% stake in the Russian company. Hopefully this will give AvtoVAZ the neccessary fund and technology to modernize its cars while giving Renault the opportunity to grow in Russia.

Brief History

The former Soviet Union was good at building missiles, jet fighters, tanks and just any military machines, but building passengers cars for its people were never its strength. The 5-year plan in 1966 called for establishing a national car maker at a purpose-built city called Togliatti near the Volga River, about 800km east of Moscow. The factory would be known as Volga Automotive Plant, or in short AvtoVAZ. Substantial help was given by FIAT chairman Giovanni Agnelli II, one of the rare Western friends of the communist USSR. In exchange for cheap Soviet steel, FIAT helped designing the Togliatti plant and offered the blueprints of FIAT 124 to form the basis of the first Russian people's car, Zhiguli VAZ-2101. That car rolled off the production line in 1970.

VAZ-2101 Zhiguli (1970)

When the planned economy started rolling, it could be faster than anyone else. By 1973, Togliatti was already producing 660,000 cars a year ! The same year also saw its first export to the Western Europe, where it was known as "Lada". However, the relationship with FIAT didn't last long - not a surprise as the latter's reputation was ruined by the rust of Soviet steel in 1970s. Togliatti continued building the aging Zhiguli while started developing its own design. The first fruit was Niva (VAZ-2121), a small 4x4 offroader that was found tough and very suitable to the environment of Soviet Union.

VAZ-2121 Niva (1976)

Unfortunately, other new models did not repeat the success of Niva. The Samara hatchback (VAZ-2108) born in 1984 was the company's first front-wheel drive car, supposed to be a big exporter, but its sales plan did not quite materilized because of poor quality and outdated technology. Compare with Western car makers, the Togliatti plant was far less efficient, employing far more people to produce the same number of cars. Moreover, under the planned economy it had to bear the welfare of the whole Togliatti city. As a result, it was short of fund to upgrade its production line and develop its new products.

VAZ-2110 (Lada 110) (1996)

Following the reform of the communist party, AvtoVAZ was privatized in 1993. It survived the nation-wide economic chaos in the next decade but by then it had already lagged a long way behind the world. Its cars were no longer competitive against Korean and even Chinese and Indian cars. Obviously, the only way to save it would be to find foreign partners. In 2001 it formed a joint-venture with GM to produce the updated Niva 4x4. In 2008 it sold 25% stakes to Renault in order to secure its investment and technology.