The Time for New Opportunities

International Forum of Automotive Industry “Automotive Industry. Automotive Components-2015” was held in Togliatti on September 30 – October 1, 2015. The major industrial event gathered above 600 top managers and experts from Russia, France, Spain, Slovenia and CIS countries. Participants of the Forum discussed the subjects of re-engineering and modernization of enterprises, new requirements to materials and equipment, ways of state support to automotive industry, quality control systems and other important issues. Government of Samara region and JSC AVTOVAZ were organizers of the event.

Main goal of the Forum was to analyze situation in Russian automotive industry and to discuss development prospects. According to forecasts of analysts, the external political and economic situation is unlikely to change its trend next year. Therefore, companies must look for new opportunities to reduce costs and to strengthen their positions in the market with tough competition.

In opinion of Vladimir Gutenev, 1st Vice-Chairman of Committee on Industry in the State Duma of the Russian Federation, 1st Vice-President of the Union of Machine Builders of Russia, localization is getting especial importance for the carmakers in the current environment. “In the conditions of ruble devaluation, purchase of components in national currency helps suppressing price growth and keeping profitability. Many automotive groups started to reinforce production localization in Russia, even exceeding the scope of requirements to industrial assembly. This concerns, first of all, Peugeot Citroen, Ford Sollers and Mitsubishi. Localization rate of sedan LADA Vesta at the time of its launch by AVTOVAZ is already 71%, and the plan is to increase it further up to 85% in future. 60% of the car is made in Togliatti. This trend should be continued”, - said Vladimir Gutenev.

The Member of Duma reminded that the Government provides substantial support to companies of automotive industry. According to him, Ministry of Industry and Commerce of the Russian Federation intends to allocate 7 more billion rubles this year to support demand for cars.

Government of Samara region is also actively participating in solving of problems of the industry. Оleg Zhadaev, Deputy Minister of Industry and Technologies of Samara region, reminded the Forum’s participants of the development programs providing for subsidies to cover part of companies’ costs. Government of Samara region is also ready to provide strong support to potential participants of competitions for raising funds from federal budget.

Konstantin Kotlyarov, Leader of Innovative Projects, Engineering Function of JSC AVTOVAZ, mentioned willingness of the Government of Samara region to answer carmakers’ initiatives. In particular, JSC AVTOVAZ, Gas Fuel Ltd., ATS-Service Ltd. and Government of Samara region signed Memorandum of Cooperation in the field of natural gas application for motor fuels in August 2015. It will allow for improving environmental properties of cars produced and also for opening a new segment in the Russian market, while developing infrastructure to service cars powered by natural gas-based fuels.

President of JSC AVTOVAZ Bo Inge Andersson thanked the Government for substantial support to the industry, told of the company’s plans for next years and personally made presentation of the new models. Journalists covering the Forum’s events were interested in the timelines of start of sales of the sensational novelty LADA Vesta. Bo Inge Andersson explained that the product delivery will be arranged in three waves: in November the new model will appear in showrooms of 22 largest cities of Russia, then in smaller ones and by March 2016 all AVTOVAZ dealers will get the car. “We are planning to sell 100,000 units of LADA Vesta a year”, - AVTOVAZ President shared the plans.

Reduction of sale volumes was mentioned by actually every participant of the Forum. In particular, General Manager of Faurecia Emissions Control Technologies Russia Jean-Pierre Schmitt reported of expected 20% reduction of his company’s revenues in 2015 versus plan. Nevertheless, AVTOVAZ’ suppliers are optimistic as they place their big hopes on new developments of the Togliatti car plant.

Head of Powertrain Components Purchase Department of JSC AVTOVAZ Dmitry Dyachkov told of the huge work made by the company during the last year in effort to reduce costs of materials and components’ makers. For instance, unification and common standardization of materials supplied to AVTOVAZ-Renault-Nissan purchasing alliance was performed in order to save time and money of the companies cooperating with AVTOVAZ.

Participants of the Forum discusses a wide scope of issues during round tables and panel discussions – from current needs of the industry up to support to launch of advanced developments. Final conclusion: The current crisis makes domestic manufacturers look for and find new opportunities for development and stimulates processes of re-engineering, production modernization, staff skills improvement and mastering of new competences.

Next International Forum of Automotive Industry “Automotive Industry. Automotive Components” will be held in Togliatti in autumn 2016.