| Since 2005, the GM-AvtoVAZ joint venture will launch production of the Opel Astra The GM-AvtoVAZ joint venture has officially announced the launch of a new project for the middle class in 2005. As expected, at yesterday's press conference, Vladimir Kadannikov, who heads the boards of directors of AvtoVAZ and the joint venture, revealed the name of the new model being prepared for launch, which was kept secret. It became the Opel AstraT 3000. The car will be sold only on the Russian market and exclusively under the Chevrolet brand. Analysts believe that the new project is a significant technological leap for both AvtoVAZ and the Russian automobile industry as a whole.
The VAZ workers themselves say that a new era has begun for the Togliatti plant - integration into the global automotive industry.
The Americans were thinking about assembling an Opel Astra, the main advantage of which is its relative cheapness, from the very beginning of cooperation with AvtoVAZ, intending to make it the base car for the joint venture. Two years ago, AvtoVAZ’s partners could not decide to take this step, considering sales of German-assembled Opel Astra in Russia quite satisfactory. This determined the choice of the joint venture in favor of the cheaper Chevrolet Niva, which has been produced since September 23, 2002. Let us recall that in 13 months more than 17 thousand cars have already been produced in Tolyatti. The production volume of the GM-AvtoVAZ joint venture should be 75 thousand cars, of which 17 thousand will be Opel Astra cars.
Despite plans to increase Chevrolet Niva production, the project to assemble a foreign model was not shelved and continued to be considered by partners as the next step.
It was made after American colleagues received the first fruits of cooperation with a Russian partner and were convinced of the ever-increasing demand in the Russian market for cars of this class. “Chevrolet Niva sales have exceeded our expectations,” said GM Europe President Michael Burns. -- The great market potential for Russian-made compact cars is obvious to us, but the new project also demonstrates our confidence in the success of the joint venture and long-term relationship with AvtoVAZ.
Successful sales of SUVs, as well as the growth of the automobile market in Russia predicted by the company's shareholders, confirmed the partners to make the final decision on the production of the Opel Astra sedan, confirms Mr. Kadannikov. According to the head of AvtoVAZ, there is a tendency in the country to increase sales of cars in the middle and high price categories - 7-10 thousand and 10-15 thousand dollars. This price segment, according to Togliatti marketers, will grow, and Sales of cheaper cars are falling. Therefore, GM-AvtoVAZ is in a hurry to occupy a growing market niche.
Analysts already have no doubt that the car will find a buyer, and the market will accept the entire volume of cars produced at the joint venture. The design production capacity of the new model, according to GM-AvtoVAZ General Director John Milonas, is planned at 17 thousand cars per year. However, when exactly this figure will be reached, the leaders of the joint venture did not specify, saying that in 2005 a pilot batch of 1.5 thousand new cars will be assembled.
The retail price of the new car will be known immediately before production begins. According to the head of AvtoVAZ, in the price segment the Opel Astra will compete with the Ford Focus produced in the Leningrad region. However, we can already say with certainty that the new car will be cheaper than the current Opel Astra, which now costs about $13,300 in its basic configuration.
For the joint venture, the new project will cost $100 million, which is exactly how much, according to Mr. Kadannikov, will be invested in the launch of the Opel Astra. According to the head of the joint venture, to launch the series there is no need to attract loans, since production will be organized at the expense of GM-AvtoVAZ’s own funds, which, as Mr. Milonas noted, is capable of doing this “both morally and technically.” Shareholders' investments in the release of the new brand will be made on a parity basis.
Experts have long cast aside doubts that the only chance to save the Russian automobile industry is not so much the financial resources of Western investors as the export of modern technologies. AvtoVAZ has already received this chance. Unlike the previous joint venture project - the Chevrolet Niva, which, in fact, was a modernized version of the VAZ SUV - the Opel Astra is a 100% Western car. In the future, the experience of its production will be transferred to cars coming off the AvtoVAZ assembly line, just as at one time the methodology for launching the Chevrolet Niva car helped, according to Mr. Kadannikov, to shorten the preparation time for the production of the new VAZ Kalina car.
For AvtoVAZ, this is a big leap forward, agrees Elena Sakhnova from the investment company UFG, emphasizing that the path to improve quality chosen by the plant is the only correct one today. Now development is only possible through copying; progressive evolution will take too much time, the analyst believes.
The joint venture of AvtoVAZ promises growth prospects for the market of Russian auto component manufacturers. Mr. Milonas claims that the share of Russian spare parts in the production of Opel Astra will in the near future amount to 33%. Maya ALEXEEVA |
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