Mon, May 07, 2012 - Page 13 News List

Russia says goodbye to a car and an era

In a decision that symbolizes the decline of the country’s auto industry, Russia to halt production of Lada Classic series this year

By Timothy Heritage  /  Reuters, MOSCOW

AvtoVAZ bowed to the inevitable last month by halting production of the 2107 after 30 years, even though the current starting price is low at US$7,000, provoking furious debate among car lovers in Russia.

“Let’s be reasonable and not dream of AvtoVAZ continuing to produce models without changing them for 30-40 years,” wrote a contributor to an online forum who gave his name only as Sony.

But many contributors disagreed. “AvtoVAZ has personally handed the market for budget cars to the Chinese auto industry, surrendered without a fight,” wrote one named only as Maxim.

Times are tough for Russian carmakers even though Frances’s Renault and Japan’s Nissan will take control of AvtoVAZ under a deal with state company Russian Technologies.

Lada sales fell 15 percent year-on-year in the last quarter and AvtoVAZ is recalling nearly 100,000 new Ladas because of technical faults, including 70,000 Lada Kalinas, a model Putin promoted by driving it 2,000km across Siberia in 2010.

Putin also tried to promote the new Lada Granta last year but took several attempts to start it when he test-drove it.

The decline in the national car industry is all the more galling for domestic producers as Russia is on track to become Europe’s biggest car market by the end of the decade, driven by rising incomes and a surge in consumer spending.

Car sales are expected to grow about 6 percent this year to 2.8 million vehicles and reach 4 million by 2015.

Renault, General Motors and Ford are among global players in the early stages of expanding sites or moving into those owned by Russian partners.

Many Russian experts are not optimistic for the future, saying Russian cars simply do not compete with foreign brands but some say increased competition will benefit consumers.

“Despite all the criticism of the authorities that you hear now, a new auto industry has been built on Russian soil, an industry which produces Ford, Volkswagen, Renault, Hyundai cars and so on,” said Alexander Pikulenko, auto industry commentator for Ekho Moskvy radio station. “The main thing is the consumer can get a good product that’s reliable, safe and cheap.”

Some Russians, however, are unlikely ever to be appeased.

“You see all these fancy foreign models in Russia now but we used to be proud to drive our own cars,” said Nikolai Peshkov, a businessman from Izhevsk, the city where the last 2107s were made in Russia. “I suppose there was no real choice then, but the Zhiguli was the real dream. If you had one, you had respect.”

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