Install

Get the latest updates as we post them — right on your browser

Today's paper. Last Updated: 02/09/2012

Zhukov Says AvtoVAZ Needs More Assistance

Reuters

Deputy Prime Minister Alexander Zhukov called for new support measures at AvtoVAZ’s mammoth car factory on the Volga to avoid social unrest, as data on Monday showed that car sales in the country plummeted again in July.

Data from the Association of European Businesses showed that car sales fell 58 percent last month compared with the same period a year ago, a slightly worse showing than the 56 percent slump seen in June.

Analysts and government officials have warned that social unrest could radiate from the automotive sector, where companies have been forced to lay off workers, cut wages and shorten work weeks since last fall.

In a rare acknowledgement of the gravity of the problem, Zhukov called for special measures to save jobs in Tolyatti, where AvtoVAZ is located, but said further production halts could be necessary.

“I think the situation in Tolyatti needs a special program for stabilizing the labor market considering a possibly temporary halt to the factory,” he said, Interfax reported.

Last week, about 2,000 autoworkers and their supporters protested in Tolyatti after AvtoVAZ shut down its flagship production facility for the month of August, despite receiving more than $1 billion in government help.

That protest echoed this winter’s unrest in Vladivostok, where demonstrators clashed with police over higher import tariffs imposed to protect domestic makers like AvtoVAZ, which is partly owned by France’s Renault.

The AEB data showed that Russian car sales were down 50 percent in the first seven months of this year, meaning that 881,754 fewer cars have been sold in the period than a year ago.

Among the biggest losers were some of the world’s leading carmakers, including Toyota, Ford and Hyundai, all of whose sales fell by more than 70 percent year on year in July.

Global auto majors had expanded aggressively into Russia over the past years, expecting it to become Europe’s largest market in 2009, as it had long been among the fastest growing.

But instead an unprecedented decline has set in, contrasting sharply with other large emerging markets.

The backbone of Russia’s rescue package for the auto industry has been a subsidy offered to banks for lowering the price of car loans.

But officials and car dealers have said it is failing to attract buyers in significant numbers, even though the state extended the subsidies to a broader range of cars in early July.

“We hope the actions taken by the government will start to reverse this trend during the summer but urge close monitoring of the situation to ensure the actions are taking effect,” said David Thomas, chairman of AEB’s automobile manufacturers committee.

Sales of AvtoVAZ’s Lada brand fell 42 percent year on year in July, slightly better than its average decline of 44 percent for the first seven months of 2009.


Also in Business

Sheremetyevo Soaring After Revamp

Sheremetyevo management hailed a 150 percent profit jump as proof the airport's extensive regeneration is paying off.

Russia Last in BRICS For Faith in Business

Russia has seen the degree of confidence in its authorities falling dramatically this year in the wake of recent anti-government protests, as a survey said Wednesday that only 26 percent of respondents trust the government, down from 39 percent in 2011.

January Non-CIS Imports Rise to $15Bln

Imports into Russia from non-CIS countries grew 26.7 percent year on year to $15.3 billion in January, according to preliminary data published on the Federal Customs Service's website.

Alcohol Delivered After Hours

According to the law, it's not possible to buy alcoholic beverages at night, but there are ways around that. For example, alcohol can be received as a present, rented, or accepted as collateral.

TNK-BP Spending $12Bln To Develop Yamal Oil Fields

TNK-BP plans to spend $12 billion to develop four fields in the Arctic Yamal region as it invests in new projects to offset declines at some of its older deposits.

Russian Railways to Build Line in Borneo

Indonesia plans a $2.4 billion rail line, together with state firm Russian Railways, on Borneo Island, which will initially be used to transport coal.




Discussion
The Moscow Times welcomes your comments and invites you to discuss topics with other readers. Your comment will be posted automatically to enable a live discussion. If you aren't familiar with our comments policy, you can read it here.

If you're a registered user, you can start typing your comment below. If not, take a moment to sign up. and then return to the article.

If your comment doesn't appear, contact us by using our web form.

Comments

Comments via Facebook

print


Comments

This article has no comments.

Be the first to leave a comment





Most Read