Two-thirds of the monthly salaries are paid to employees.
Massive financial, trade and transport sanctions are forcing Russia into adapting to a new reality in which most of its business is either under reduced load or not operating at all. Tens of thousands of companies around the globe have stopped operating in Ukraine since the invasion. This has had a serious impact on the auto sector. Nearly all European automakers have stopped operations in Russia, and it appears that even Lada faces difficulties continuing to do business.
A new report by The Wall Street Journal states that the AvtoVAZ brand has stopped production at its Togliatti main plant due to a lack of vehicle components. Renault controls 67.61 percent of AvtoVAZ. It relies on supply from its Romanian factories. More than 20 percent of Lada’s parts come from other countries. Lada’s Izhevsk factory has also stopped making cars.
Production has been stopped temporarily for the moment, but it is likely that this is just the beginning. More interruptions are possible. WSJ reports that a former member of AvtoVAZ’s board stated that “if trade ceases, AvtoVAZ ceases,” because Lada relies heavily on parts from other countries. Although Russian media has not yet released a statement from the manufacturer, Russian media stated that the following statement was coming from them:
“In light of the continuing crisis in electronic components supply, and to prevent a significant drop in the income level of company employees, the AvtoVAZ administration took the following decisions regarding the work schedules of factories in Togliatti, Izhevsk: March 5, 20,22 is declared a downtime with pay. The pay for the period March 9-11 is two-thirds the average monthly earnings
Data from MarkLines shows that Lada was the most popular Russian car brand with 22,378 deliveries in February, a decrease of 20.8 percent over the previous month. Local media reported that the Granta family, Lada’s most popular model, was affected by the strike. This means that March’s numbers will likely be lower.