Lada, the Iconic Russian Automaker, Stops Building Cars—at Least for Now

Lada, the Iconic Russian Automaker, Stops Building Cars—at Least for Now
Lada, the Iconic Russian Automaker, Stops Building Cars—at Least for Now
  • Russia's invasion of Ukraine has stopped many imports into Russia, which resulted in a stoppage at Lada's assembly plants this week.
  • A Renault spokesperson in Russia (Lada models are made by Avtovaz, which is controlled by Renault) told Car and Driver that limited production will restart next week, but with some forced time off on down days.
  • Last year, Lada models made up 21 percent of all new cars sold in Russia.

    The first cars under the Lada brand appeared in 1973 during the Soviet era, and the brand is such a symbol of the country that Russian president Vladimir Putin has frequently posed for photos behind the wheel of Lada vehicles. Now, economic sanctions imposed by the U.S. and Europe in response to Russia's invasion of Ukraine have, at least for a time, stopped production of the iconic auto brand.

    The Wall Street Journal reported that Lada's auto factories "ground to a halt" this week because sanctions left the Russian facilities without the components and supplies required to build new cars. Groupe Renault holds a 67.6 percent controlling stake in Avtovaz, the company that builds Lada vehicles. The Journal said that more than 20 percent of the parts Avtovaz needs are imports, which have mostly dried up in the last two weeks.

    "If trade stops, Avtovaz stops," a former Avtovaz board member told the paper. "Putin knows that he can’t do it by himself." The board member added that it could take months or perhaps years to start up production again if Avtovaz loses support from Renault. For now, though, some sort of solution to the production stoppage is in the works, based on an Avtovaz statement about restarting car assembly next week.

    "The company is making every effort to be back to a normal production schedule at its plants in Togliatti and Izhevsk as soon as possible," Sergey Ilinskiy, a Renault Group spokesperson based in Russia, told Car and Driver.

    The "ongoing crisis in the supply of electronic components," Ilinskiy said, means that Avtovaz production will look different next week than it usually does. Assembly of the Lada Granta and the Niva Legend, for example, will run at full speed for two shifts over three days next week, but March 14 and 15 will be declared as "downtime days" with employees getting paid two-thirds of their average income. Workers at Togliatti who work on producing components will continue to make those items with an eye towards aftersales as well as once again assembling new vehicles.

    Meanwhile, Lada's Izhevsk plant will continue preparations it needs to do to build the Vesta New Generation model, Ilinskiy said, but workers there who aren’t directly working on the car will be forced to take time off next week (Ilinskiy called it "downtime mode"). Ilinskiy said other Avtovaz functions and subsidiaries, like those involved with producing and distributing spare parts or customer service representatives, will continue working full time.

    This may be more than you care to know about the vacation schedules of Russian auto workers, but it relates to the fact that the ruble has lost around 30 percent of its value since the invasion began in late February. So opting to take time off sooner than later could be a popular move among workers who see the value of their money declining so precipitously.

    The Wall Street Journal said Lada vehicles made up 21 percent of all sales in Russia last year, and with foreign brands suspending their own production in the country as well as pausing imports into Russia, car buyers in Russia might be about to face a more constrained marketplace than the U.S. is dealing with two years into the pandemic. Russia has imposed its own export bans on over 200 products, the BBC reported, including vehicles.

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