The Volzhsky Automotive Plant (AvtoVAZ), a major Eastern European carmaker, can annually manufacture over 750,000 cars. In 1970-2009, AvtoVAZ has made over 25 million Lada cars and car-assembly kits.
On July 20, 1966, the Soviet Government passed a resolution on building an automotive plant with an annual capacity of 660,000 cars in Tolyatti. AvtoVAZ was officially founded on that day. The creation of the new Soviet automotive giant is closely linked with Italian automotive giant FIAT, which signed a protocol on cooperation in science and technology with the Soviet Automotive Industry Ministry.
AvtoVAZ was built over a remarkably short period. Earth-moving operations began in 1966, and the first VAZ-2101 cars rolled off the assembly line in 1970, giving rise to the popular Lada motor vehicles.
AvtoVAZ was conceived as an enterprise with a high degree of production concentration. It comprises foundries, presses and production facilities turning out plastics, car bodies and other components. The company manufactures unique instruments, machine-tools, robots and automated transfer lines for its own production programmes.
At present, AvtoVAZ assembles low-budget passenger cars costing between 150,000 and 350,000 roubles.
The plant assembles fourteen models of the following five main Lada series:
* the Lada Priora series since 2007;
* the Lada Kalina series since 2004;
* the Lada Samara series since 1984; restyled in 1998-2001;
* the Lada SUV series since 1977; restyled in 1993;
* the Lada 2105/2107 series since 1979 and 1982, respectively.
In 2008, AvtoVAZ manufactured 801,563 Lada cars.
In 2009, AvtoVAZ will start making the Lada Priora station wagon and also plans to launch small-batch production of Lada Kalina Sport 1.6 and Lada Priora Coupe vehicles. The Lada SUV series will also be overhauled for enhanced comfort and reliability in series with current market standards.
AvtoVAZ covers an area of more than 600 hectares and has over four million square metres of floor space. Corporate workshops have more than 41,000 units of equipment and over 300 km of assembly lines. The main assembly line is 1.5 km long.
At present, AvtoVAZ employs about 104,000 workers, whose average age is 40, including about 50,000 females and about 54,000 males. Young people aged under 30 account for 27.6% (over 30,000) of the workforce.
In 2008, average calculated monthly wages totalled over 20,000 roubles.
Over a thousand companies supply components and materials to AvtoVAZ and are involved in car maintenance.
Starting with September-October 2008, AvtoVAZ began to have from serious problems after iron-and-steel plants raised prices by 60%. Corporate production costs soared after car-component suppliers also raised prices by 12%. Production of several models became unprofitable, because AvtoVAZ failed to offset this pressure by raising retail prices. The enterprise raised car prices by 4.4% in order to compensate for supplier price hikes, also raising shipment prices for car dealers by 6.8%.
In 2008, AvtoVAZ posted an estimated 6.2 billion roubles in losses.
In January 2009, AvtoVAZ stopped its main production facilities and took advantage of forced downtime to service and overhaul its equipment. The main operations were conducted at its iron-and-steel, press, mechanical assembly and car body production facilities. Equipment was upgraded on a par with repairs and preventive maintenance. The enterprise, which readjusted the body-welding series, will use it to manufacture the Lada Priora sedans.
Due to the unfavourable economic situation and shortage of cash, AvtoVAZ was forced to introduce a new system of payments and settlements involving car components and materials suppliers. Under the system, 30% of obligations are paid in cash, and the rest in promissory notes. The latter's value added tax was paid in cash.