Lada Granta will enter the assembly line in Azerbaijan – Kommersant FM

AvtoVAZ launched production of Lada cars in Azerbaijan. The Granta model was the first to be assembled there, but in the future the plant expects to add Niva SUVs and Vesta sedans to it, the press service of the Russian automaker reported. AvtoVAZ organized production at the site of one of the local partners. The company will supply only car kits there, and finished cars will be stored at the enterprise. Local personnel were trained by specialists from Togliatti.

The company plans to assemble approximately 1.5 thousand cars in 2024, and in the future increase volumes to 5 thousand units. Auto expert Igor Morzharetto believes that these are rather modest figures: “Assembly in another country is not always economically justified. But maybe there is a meaning to this: we collect something, and this makes it possible for the entire model range to enter the market. Because there are a lot of companies that would like to start working in some country, but there are serious internal restrictions there. This was the case, for example, with Uzbekistan.

AvtoVAZ has some serious directions, and we need to look for exits to other markets, because this is really very important, so Azerbaijan is quite interesting in this regard. It may not be easy, but it is promising.

It is economically profitable to produce approximately 30 thousand cars, but there is no talk of such a quantity yet. At the same time, Azerbaijan is not a very large country, but quite successful from an economic point of view. There are cash buyers there. And if AvtoVAZ wants to offer them something interesting, then for God’s sake. Moreover, the manufacturer previously had a strong position there; now the province still drives AvtoVAZ cars. And, of course, it is more profitable for the concern to go with the Lada Granta, because it is affordable. Few can offer cars in this class at this price.”

In 2023, the American authorities included AvtoVAZ on the sanctions list. After this, the head of the company, Maxim Sokolov, stated that this led to the blocking of the concern’s payments by banks of both unfriendly and friendly countries. As a result, the number of refusals to cooperate with the automaker increased, and he even had to reduce the production plan by 10%.

And the sanctions really greatly limit the circle of potential partners for the Russian automaker, noted Delcredere lawyer Artem Kasumyan: “If a company is included in the SDN list, then this formally does not create any legal consequences for it in relation to doing business with non-American persons outside the jurisdiction of the United States using currencies other than the US dollar, or using goods that are not controlled by the US.

But in practice, of course, when restrictions are introduced against a company, its counterparties may have concerns. After all, the Americans apply secondary sanctions due to interaction with those on the SDN list.

In addition, these criteria are changeable and are not very clear in law enforcement practice. As a rule, companies want interaction with the American dollar. But there will always be those that are not very interested in this, for example, companies that pay in other currencies and do not trade with American persons and/or American goods.”

In the summer of 2023, the head of AvtoVAZ, Maxim Sokolov, announced negotiations with Ethiopia regarding the export of Lada cars and their assembly within the country. The country’s ambassador then noted that Sudan, South Sudan, Kenya and Somalia could also be potential markets for the company.

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Vladislav Viktorov