Russia's Kamaz to shorten work week due to truck market crisis
Russia's leading carmaker Avtovaz and the Gorky Automobile Plant both said this week that they may reduce their working weeks to four days from five, highlighting prohibitively high borrowing costs that are squeezing demand and hurting producers.
The Bank of Russia, which has been under pressure from government officials and business leaders for months over high rates, is expected to slash borrowing costs by 200 basis points to 18% later on Friday, according to analysts polled by Reuters.
Kamaz said Russia's market for trucks over 14 metric tons had slumped by 60% in the first half of this year and identified two leading causes.
"1. The short-sighted policy of importers of foreign equipment, who, despite all forecasts of a declining market, imported an excessive amount of equipment last year," Kamaz said on Telegram.
"2. The central bank's monetary policy, which has led not only to the impossibility of purchasing new equipment with the help of financial tools like credit and leasing, but is also forcing transport companies and others to return equipment leased last year to the lessor."
Kamaz said over 30,000 trucks were sitting in warehouses with no demand even at dumping prices and equipment was being offloaded at well below market value.
Kamaz said it would introduce a shorter working week from August 1. The company's plight highlights wider economic woes for Russia, with growth now slowing sharply after two years of military-spending fuelled economic overheating.
Kamaz's sales are a key indicator of economic activity in Russia, both in terms of the construction sector and in trade.
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