Translated material
"Seven" Chechen assembly
AvtoVAZ will help the republic organize a new industry
On the eve of Victory Day, the Volga Automobile Plant made a gift to the Chechen Republic: together with Russian specialists, the State Unitary Enterprise Argun Plant Pishchemash began producing VAZ-21074 cars. The first two cars that rolled off the assembly line on May 8, according to Deputy Minister of Industry Sultan Rakhmaev, will be presented to the President of Chechnya, Ramzan Kadyrov, and the Governor of the Samara Region, Vladimir Artyakov. In the future, according to the Ministry of Industry of the Republic, it is planned to produce up to 20 cars per day, and by 2010-2011, increase the capacity of the enterprise to 30 thousand cars per year. However, in the near future, the region’s leadership intends to organize the assembly of not only “Sevens” and “Nivas,” but also VAZ-21099 and Lada Priora. “We plan to develop the automotive industry in the republic and open up to ten factories in the coming years, which will be engaged not only in assembly, but also in the production of components, components and machine parts,” Mr. Rakhmaev noted. According to Ramzan Kadyrov, Chechnya has been moving towards this for two long years, and the arrival of AvtoVAZ in the republic should become “an example for others.”In January 2008, AvtoVAZ and the government of Chechnya entered into a cooperation agreement, according to which the plant undertook to assist Chechnya in organizing the assembly production of Lada cars, developing training programs for workers and specialists, as well as in determining the range of automotive components for production in the republic. . Initially, it was planned to produce only two AvtoVAZ models - Lada 2107 and armored versions of the Lada 4X4 SUV (Niva). However, according to the press service of the President of Chechnya, the company will soon also begin assembling VAZ-21099 sedans. In general, within the framework of this project, AvtoVAZ and the Chechen Republic plan to build four factories for the production of components and one car assembly plant. According to Deputy Minister Mr. Rakhmaev, 75 Chechen specialists who will work at the enterprise have already been trained at AvtoVAZ and are now helping to install equipment and set up production.
Analysts have not yet undertaken to predict the success of the enterprise and say that the agreement with AvtoVAZ is more of a political than an economic step. Some experts believe that this is nothing more than an opportunity for the automaker to profitably locate its outdated lines, the transfer of production of which will allow it to maintain leadership in the segment of inexpensive cars. And the government of the republic will assist the concern in promoting its own products, strengthening the Lada brand and obtaining regional tax benefits. However, for Chechnya there are no less benefits from cooperation. The main one is the elimination of unemployment. The assembly of "sevens" and the production of components and auto parts by the end of this year alone will allow employing about a thousand workers, and the Chechen government plans to increase this figure to 10 thousand jobs by 2010.
AvtoVAZ has finally eliminated the cross-shareholding structure that previously made it difficult for the automaker to attract a strategic investor. According to the company, on May 8, the process of converting the shares of its subsidiaries - CJSC Central AFK and OJSC AVVA - into its shares issued during the additional issue was completed. To this end, AvtoVAZ previously issued one additional issue of shares for each of its subsidiaries: on May 8, 96.9% of the shares issued for exchange for securities of the AFK Central Organization (or 320 million shares) were placed, and at the end of April, in the same way additional issue shares were placed, intended for exchange for shares of OJSC AVVA (92.6% of the issue, or 157 million shares). Thus, the enterprise has completed the last stage of eliminating the cross-ownership scheme, which opened the way for French Renault to receive 25% and one share of the enterprise. Rosoboronexport and Troika Dialog will receive 75% minus one share in AvtoVAZ.