The new CEO of AvtoVAZ, Nicolas Maure, has pledged to use as many Russian suppliers as possible as he looks to drag the loss making carmaker back to competiveness. The former Dacia CEO is experienced in profitable low-cost car production in his previous role and he has held discussions with Russian trade minister Denis Manturov over his strategy for the business. Manturov said, "We spoke about using Russian parts as much as possible. He completely agreed with me. What's more, he already had this experience in Romania." The minister also added that he is focusing on trying to develop the local automotive components industry in order to further support Maure's aims for AvtoVAZ.
Significance: Maure has all the credentials required on paper to make a success of running AvtoVAZ, having successfully overseen the growth of Dacia as a mainstream budget car brand that has been introduced by Renault to the wider western European market in the last five years. However, while AvtoVAZ remains almost completely dependent on the Russian market, (and it is difficult to see how the brand can easily expand outside Russia given that Dacia already occupies the entry-level position for Renault in the wider European market), Maure's task looks very difficult. The Russian market fell by 36% in 2016 and in the first quarter by a further 17%. He can also talk about using more Russian suppliers but one of the principal reasons his predecessor Bo Andersson had to step down was because he upset local suppliers by attempting to eradicate some of the somewhat opaque relations between the OEM and its suppliers and move towards clearer contracts regarding delivery and payment schedules. Manturov added that AvtoVAZ will look to hold meetings with Russian component suppliers in order to select new suppliers and establish new contracts. He said this refers to both Russian-owned component suppliers and companies with foreign capital that have come to Russia and ensured the necessary level of production localisation.
