AvtoVAZ prepares an increase in prices, which finally equalizes LADA with cheap foreign cars

The largest manufacturer of cars in Russia "AvtoVAZ" from the New Year plans to once again raise vacation prices. This will be the fourth rise in price of VAZ products in a year. Meanwhile, already now, with difficulty competing with cheap foreign cars, vases in terms of growth in sales are significantly lags behind the rest of the automotive industry. Against the background of all increasing sales of foreign cars in Russia, the market share of the main domestic car producer fell this year from 47 to 42%, and production increased by only 4.3%.

Russians are increasingly stopping their choice on new foreign cars in a cheap price segment, the Gzt.ru newspaper notes. Over the year, the share of sales of new foreign cars in the Russian market increased from 15 to 25%. And in terms of the volume of the proceeds , foreign cars have long overtook the products of the domestic automobile industry. Experts expect that according to the results of 2004, foreign cars in Russia will be sold by about $ 8.5 billion, while about 5.5 billion will be able to help out for domestic cars.

The largest rise in the price of cars under the LADA brand - an average of 4-6 thousand rubles - occurred in October. Representatives of the plant explained this fact by the transition to a new 1.6-liter engine. In addition, Lada was getting valuable at the beginning of the year, in February and in March. And the total increase for the year amounted, according to car dealers, about 7%. From January 1, a new increase is expected - as a whole in the model range by 2-3%. These at first glance are not too significant numbers mean for "AvtoVAZ" the loss of positions in competition with foreign cars in a low price niche.

The factory says that the main reason for the regular price of price tags is an increase in energy prices and metals. AvtoVAZ put the rise in the cost of resources in an extremely difficult position: the plant is forced to increase prices for its products and at the same time faces more and more often competition from cheap foreign cars.

The most popular models of the tenth Lada family are today in the basic configuration of about 7.5 thousand dollars - without airbags, rudder of the steering wheel and air conditioning. This is not much cheaper than foreign cars in the basic configuration. Daewoo Nexia costs 8 thousand dollars, Hyundai Accent - 10.3 thousand dollars, Kia Rio - 11 thousand dollars, and Renault Symbol - 7.6 thousand. By the way, Renault threatens to take a significant part of the market from AvtoVAZ next year by launching the Renault Logan model to the Autoframos joint venture. In the promising plans of the joint venture, the release of 100 thousand cars per year, although in the first year the indicators, of course, will be more modest.

According to the President of the Association of Automobile Products of Russia, Evgeny Levevich, to correct the position of AvtoVAZ in the market, the began production of Kalina cars. Next year, the plant plans to make 30-40 thousand of these low-profiles, and by 2007 to reach the design capacity of 220 thousand cars. However, Kalina will not cost cheaper than a dozen, and its price in full configuration can step over the line of 10 thousand dollars.