AvtoVAZ, the largest vehicle producer in Russia, plans to increase its production output to 400,000 vehicles this year, with further increases expected in the second half of the year following the validation of components. The company has been localising its supply chain to replace imports following the imposition of economic sanctions on Russia by Western nations. As well as stockpiling components to maintain production momentum, the manufacturer is also testing components.
AvtoVAZ’s efforts to localise its supply chain has seen it switch to using parts from new partners from friendly countries, as part of a step-by-step import substitution plan, after major shareholder Renault divested its stake in the company last year. In addition to the move towards localisation, the automaker is preparing for the start of production at a former Nissan factory in St Petersburg in Q2, with plans in place for the production of several new Lada models.
The company has announced its own scrappage programme and is keen for the domestic auto industry to benefit from further incentives, such as scrappage incentives. AvtoVAZ has been working on a more extensive localisation drive since 2022, with more than 200 components already localised, and additional localisation work set to continue throughout 2023. AvtoVAZ President Maksim Sokolov confirmed that the company intends to produce more than 400K cars in 2023, stating that stocks are being built to enable non-stop work of production lines in the second half of the year.
