Russian car concern AvtoVAZ is on the verge of bankruptcy and is asking for help from the state.
The Russian car industry is falling fast. The AvtoVAZ concern is stuck in multi-billion dollar debt and will not be able to get out without government subsidies.
Sergei Chemezov, head of the Rostec group, which owns more than 32% of AvtoVAZ shares, spoke openly about this to the Russian media, reports. Discussion.UA.
Chemezov complained about the main rate set by the Central Bank of the Russian Federation at 21%, which is unaffordable for Russian business. Even a player as big as AvtoVAZ, which is heavily involved in defense procurement and receives large orders from the Ministry of Defense, was heavily in debt.
“In fact, AvtoVAZ’s credit burden is high… With the increase in the prime rate, interest payments to banks increased by billions of rubles annually“, said the head of Rostec.
Without financial support from the state, the company will not be able to pay creditors.
“The state also understands this and is not abandoning the plant… It is being discussed how to help in this situation“, Chemezov said.
As of September 2024, AvtoVAZ’s debt has already exceeded 100 billion rubles (more than $1 billion at the official exchange rate). The company is asking the Kremlin not only for financial support and benefits, but also protection from dumping imports. The fact is that as part of the Russian Federation’s turn to the East, the Russian market has been flooded with cheap Chinese cars. And the Russians give them more choice than domestic developments, which are often more expensive and of lower quality.
Today, about 89% of the money that Russian citizens spend on buying cars goes to China. By the end of this year 2024, according to experts, the number of Chinese cars bought by Russians will be about 900 thousand units. AvtoVAZ, which cannot withstand direct competition, accounts for only 11% of the market.
Before that Discussion.UA report that the head of Russia AvtoVAZ made me laugh Network, recommending the new Lada.
We also wrote that at AvtoVAZ sounding the alarm: cars are getting more expensive, and 89% of the money from what they sell in Russia goes to China.
2024-11-12 19:31:00
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