Bo Andersson, a former top purchasing manager at General
Motors, is the first non-Russian CEO of AvtoVAZ, which is now controlled by
Renault-Nissan. Andersson, a Swedish national, is tasked with turning around
AvtoVAZ's struggling Lada unit, whose sales have been hit hard by competition
from Western brands. He spoke with Automobilwoche, a sister publication of
Automotive News Europe.
How are tensions between Russia and the Ukraine affecting
Lada.
Russia is our biggest market, not the Ukraine. Political instability
doesn’t necessarily make our business any easier. On the other hand, a certain
nationalism benefits us at Lada. And the weaker ruble helps us since Lada
sources three quarters of its components from this currency zone.
How important are Germany and the rest of Europe to Lada’s
business?
Germany is a very interesting market, but we do not have the
right products for it yet. Our exports are now focused on Kazakhstan, the
Ukraine, Azerbaijan and Belarus. We are also quite strong in Egypt and Tunisia,
along with Peru and Nicaragua. We want to grow strongly in Europe with the new
models I just mentioned.
You want to boost Lada's market share in Russia to 20
percent by 2016.
How do you expect to succeed in a difficult economic
environment?
Last year, our market share was 16 percent, and for the
first half we are already at more than 17 percent. We are working on three core
themes for future growth. First, we are improving the quality of our current
models. Second, we will soon bringing out interesting derivatives of these
models, such as a crossover version of the Kalina. And we are introducing three
entirely new cars starting in September 2015.
What new cars are coming?
We are planning B-segment sedan: The new Vesta is Lada’s own
development. It will meet European safety standards, will be capable of meeting
the Euro 6 standards, and have a base price of 8,000 euros. We will also have
the X-Ray SUV and the all-wheel-drive Lada X-Ray crossover. Both are based on
Renault platforms and will offer impressively low fuel consumption, among other
things.
Does Renault-Nissan want to increase its share in AvtoVAZ?
Renault-Nissan and the Russian government already own 74.51
percent of AvtoVAZ, in the form of the Netherlands-based Rostec Auto BV
alliance. As far as anything else goes, the future will tell.
How will you increase profit margin to 6 percent in two
years?
We unfortunately lost money over the last two years. That is
why we are working hard on our fixed, material and administrative costs, which
are too high. Our production volume is still too low. In 2013, we sold 530,000
cars worldwide. And Lada can still configure its pricing even more attractively
in comparison with the competition.
Are you satisfied with Russian suppliers and their local
value creation?
Yes and no. On one hand, Russia now has many high-performing
suppliers. On the other hand, AvtoVAZ is too dependent on some monopolies. That
is why I want to create more transparency and competition in supplier
relations. For example, we could economically import certain auto parts from
Turkey in the future.
What other automakers does Lada consider to be its
benchmarks?
We can learn tried-and-tested principles of automobile
production from General Motors. During my time at the GAZ Group, Volkswagen
showed me that the Germans lead in engineering, in body stiffness, for example.
Renault can help us in the engine and drivetrain area. In turn, Nissan stands
for high quality. We are paying extremely close attention to the best concepts
in each case.
What are your first successes?
We have focused on production during my first five months at
Lada. We were able to reduce the hierarchical levels from nine to five. We have
improved productivity by 25 percent and have increased our quality by 20
percent. In Togliatti, we build 2,400 cars a day – the figure should reach
3,000 by year’s end.
How important are alternative powertrains?
Lada can already point to successes in electric vehicles,
and if we needed more from the technology – Nissan is the world’s leading company
in this field. CNG and LPG engines are becoming increasingly important in the
Russian market. Lada is very deeply involved with gas powertrains.
Does Lada need to develop in the growth markets of Brazil,
India and China?
Not in the near future. We would rather focus on 10 core
markets where we can be competitive. Our products are the key. We need to be
somewhat stronger in Sweden, Norway and Finland, where the climatic conditions
resemble those in Russian and many roads require four-wheel drive.
The Lada X-Ray concept previews the brand's new design.
In two years, which automakers will be among Lada’s toughest
competitors?
I am convinced that we have to steel ourselves for intense
competition from Chinese companies. Geely is already quite successful in
Russia. Lifan as well. And we will naturally continue to compete aggressively
against VW and GM.
What projects would you like to advance in the next six
months and what is looming in fiscal year 2015?
First of all, I would like to bring pride back to Lada. We
have many good employees who want to enjoy greater success in the auto
business. As I mentioned, we are aiming for a 20 percent market share, a 6
percent profit margin and a positive cash flow in 2016. We will continue to
hone our cost structures. And in the future, with all our body derivatives and
powertrains, we will present something new every three months. The models do
not need to represent large volumes. But they will be visually and
technologically appealing. The Lada Kalina Cross, which is being launched in
September, is one example. We expect people to say: 'Yes, it’s only a Lada.'
But they should be very proud of it at the same time.
Source: Automotive News Europe
Igor Burtsev, TV Samara: "I used LADA with three pedals, and now I tried LADA with two pedals. And I looked at it from a height of operating experience of vehicles with "robots" from the world's leading manufacturers. I can tell you about the AMT on LADA - surprisingly good ... Any car requires getting used to. If you get used to the AMT, the rapport develops almost at the level of a traditional automatic transmission. Given the huge difference in price, simple design, it turns out that the AMT - a very good option. "
AvtoVAZ President Bo Andersson personally gave a presentation LADA Priora with "robot" in Minsk, and then test the new product with one of the journalistic crews.
"For nearly 300 kilometers of 16 Russian journalists automotive media check ride quality LADA Priora with an automated manual transmission in a megalopolis, country trails and a special forum - said in a release. During the test drive, the participants interacted with the engineers of AvtoVAZ, learning of the design trends. Members of the media highlighted the dynamics of the vehicle and its efficiency, ease of operation and reliability of the automated manual transmission in a variety of modes of movement. According to motoring journalists, LADA Priora AMT at the stated price from 428 thousand rubles, even in a falling Russian market is able to attract consumers. "
