Renault-controlled AvtoVAZ is cutting hours at its manufacturing plants in Russia from June due to continuing shortages of parts and lower demand in the Russian car market in the wake of the war in Ukraine.
AvtoVAZ said in a statement that it will introduce a reduced 4-day working week at the production sites in Togliatti and Izhevsk commencing June 6, 2022 for a period of up to 3 months. The reduced 4-day working week will apply to all employees, it said.
AvtoVAZ has also decided to pull ahead the summer corporate shutdown to 4-24 April, during which it said it ‘will do [its] best to restore component supply chains’.
The company also said that ‘active work is underway to substitute some critical imported components with alternative solutions’.
The company is also preparing special versions of some LADA models with ‘reduced exposure to imported components. These will be available to our customers in the coming months, progressively, it said.
AvtoVAZ said last week that ‘all possible measures have been taken to ensure the preservation of the jobs of our 40,800 employees’.
It also said that further to the recent announcement by Renault Group, AvtoVAZ management ‘is closely monitoring the situation and is in constant contact with federal and regional authorities, as well as with the company`s shareholders’.
Western economic sanctions imposed on Russia after its invasion of Ukraine are expected to result in a sharp economic downturn this year. In an initial revision due to the Ukraine war, GlobalData has removed 1m units from its light vehicle sales forecasts for Russia this year, leaving the market at around 600,000 units. The forecasters also caution that risk is on the downside, depending on how the geopolitical crisis unfolds