Sollers is leaving Mazda – Newspaper Kommersant No. 178 (7379) of 09/27/2022

Sollers Auto is discussing the purchase of Mazda’s share in a parity joint venture for the production of cars in the Far East and is preparing a new project for this site. It is possible to re-equip the existing SKD lines, according to analysts, quite quickly. However, the production of engines, which in the past was only export-oriented, will not be able to be maintained in Vladivostok in this case: the equipment will move to the Sollers sites in the European part of the Russian Federation.

Sollers Auto is negotiating with Mazda to stop car production in Vladivostok and buy out Mazda’s stake in the Mazda Sollers joint venture, the company said. The plant in Vladivostok worked longer than most of the production facilities of foreign automakers in the Russian Federation, and was suspended only on April 30 due to a shortage of components amid a break in supply chains. Sollers reported that the supply of components to the plant was suspended. Previously, Mazda wrote about the negotiations to close the assembly in the Russian Federation Nikkei, citing logistical problems amid the hostilities in Ukraine, which make it difficult to resume production. For this reason, the closure of our own plant in St. Petersburg on September 23 informed another Japanese automaker is Toyota.

The parity joint venture Mazda Sollers Manufacturing Rus has been producing cars in the SKD mode since 2012. At the beginning of 2022, three models were produced: Mazda6, Mazda CX-5 and Mazda CX-9. The design capacity of the Mazda Sollers plant is 100,000 vehicles per year. In 2021, the enterprise produced 28 thousand cars, the plan for 2022 was 30 thousand units. Sales of cars of the brand over the past year increased by 11%, to 29.2 thousand cars (market share – 2.4%), in January-August of this year they fell by 60%, to 7.7 thousand units, follows from the data Association of European Businesses. The CX-5 crossover has been in the top 20 sales of the Russian market in recent years. In 2021 Vedomosti cited data from the Ministry of Industry and Trade, according to which the localization of Mazda in the Russian Federation was estimated at 20 points. Recall that welding and painting give 900 points, and special investment contracts (SPIC, give tax benefits in exchange for investments, as well as access to compensation for salvage collection) were signed on such minimum conditions in 2019. However, Mazda Sollers was the first in the auto industry to sign the SPIC, which provided more individual conditions.

The joint venture was engaged in production. The official distributor of the brand in the Russian Federation is Mazda Motor Rus. As Nikkei wrote, the decision to stop sales in the Russian market and service has not yet been made.

Sollers Auto’s reporting for the first half of the year reported that the company’s management is negotiating with Mazda and other partners on cooperation within the framework of joint ventures, and is also “working out alternative business projects to use these capacities.”

Now, as they say in Sollers Auto, the concern has already developed a plan to restart the plant for the production of cars of other brands and “is finalizing negotiations on this issue.”

In the summer, industry media reported on the visits of delegations from China to the site.

Sergey Udalov from Avtostat notes that it is possible to start SKD assembly of other cars on the existing conveyor as soon as possible compared to welding and painting lines. “In general, logistics to European Russia still remains difficult,” he says.

In addition to the production of cars, Mazda Sollers has been producing engines for Mazda cars since 2019 at a site with a capacity of 50,000 units per year. Cars for the Russian market were not equipped with them – the products were supplied exclusively for export. This project was also included in the SPIC.

As Sollers clarified to Kommersant, the company does not plan to terminate the SPIC, but will make changes. Sollers Auto clarified that they would not continue to produce engines in Vladivostok: “The equipment of the engine plant will be relocated to our enterprises in the European part of the Russian Federation.”

In 2021, the concern acquired an engine plant in Yelabuga from Ford. The site, where motors for passenger cars were produced until 2019, switched to the production of diesel engines for the passenger car Ford Transit. Now Transit is not produced, and the joint venture “Sollers Ford” has suspended work. At its facilities, Sollers localizes LCV under its own brand (see. “Kommersant” dated September 7).

Olga Nikitina