Russia facing major crisis, biggest car company forced to work 4 days in a week, how China destroyed Russia?
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Russia facing major crisis, biggest car company forced to work 4 days in a week, how China destroyed Russia?
Russia facing major crisis, biggest car company forced to work 4 days in a week, how China destroyed Russia?
Carmaker AvtoVAZ is facing difficulties due to the high car loans and 'price dumping' of imported Chinese cars in the Russian market.
Russia facing major crisis, biggest car company forced to work 4 days in a week, how China destroyed Russia?
Moscow: AvtoVAZ, which is the biggest carmaker in Russia, is going to make major changes in the company. It is planning to reduce its work week from five to four days. Known for its Lada cars, AvtoVAZ is forced to take this step because of the decline in car sales due to high interest rates and the increasing challenge from Chinese competitors. Its sales have declined by 25 percent in the first six months. However, the carmaker has blamed the high interest rates of Russia's central bank, because of which people are not taking car loans. The increased production cost is also haunting the country. The situation has come to the fore amid slow growth and fears of recession in Russia's economy. It is also a sign of the major impact on the economy following two years of heavy defence spending on the Ukraine war.
How Chinese Cars Dominating In Russian Auto Market
Amid slow growth and fear of recession, 'price dumping' of imported Chinese cars in the Russian market is also a major problem for AvtoVAZ. Notably, 'Made in China' vehicles now account for more than 50 percent of sales in the country. AvtoVAZ also plays a part in the country's big economy as it employs over 30,000 people.
It is worth noting, earlier the Russian government has previously provided financial assistance to the company to save it from bankruptcy.
AvtoVAZ To Reduce Working Hours
Russia's largest car company plans to reduce its working hours starting from September. It is considering working four days a week instead of five. The reason is declining sales.
In June, Russia's Finance Minister Maxim Reshetnikov warned that Russia's economy is on the verge of recession.
Russian car sales are projected to decline by 25% in 2024, mirroring a similar drop in AvtoVAZ sales during the first half of the year. Autostat reports that AvtoVAZ sales reached 155,481 units in this period, representing a 25 percent decrease.
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