AvtoVAZ’s cash share is declining
Chinese companies are «squeezing» AvtoVAZ into the low-margin segment of the car market, offering big discounts on its cars, as stated by the head of AvtoVAZ, Maxim Sokolov.
«The Chinese work in the most marginal segment of the market, that is, they collect more money with fewer cars. We are being squeezed into this low-margin segment. (…) There are fewer developments and innovations in this low-margin segment, because it needs to be sold cheaper — and now they’re pushing us there» — he stated..
At least Vesta was a good high-margin product and technologically advanced, but now Chinese competitors are starting to push Vesta with this 900 thousand ruble discount and, entering its 1.5 to 2 million ruble segment, are starting to squeeze it out.
As a result, AvtoVAZ’s share in the total monetary volume of the new car market in Russia in 2023 was about 10.8%, and in the first quarter of this year it dropped below 10%. «This is a scary trend,— Sokolov stated. — And although in quantitative terms we have about 30%, the monetary share continues to decline».
He remembered that the Russian division of Chery earned about 35 billion rubles in a year: «At the same time, Chery does not produce localized products in the Russian Federation, none at all».
Recall that AvtoVAZ proposes to increase the recycling fee for the most popular cars with engines from 1 to 2 liters to 1 million rubles by 2029.