By on February 15, 2018

Image: Lada

U.S. light vehicle sales sunk slightly in 2017 after years of increases, and this year’s not looking any different. In Russia, however, it’s the opposite situation. After making like the Germans at Stalingrad for the past three years, the Russian car market is now advancing like a T-34 tank — and it has the country’s most famous car brand to thank for it.

Leading the pack is none other than Lada, a company known for cranking out archaic, seemingly indestructible Iron Curtain cars for decades with only minimal changes. That was then, though, and this is now. Spurred by a rebounding economy, sales of new Lada models helped Renault-owned parent company Avtovaz drastically cut its losses in 2017.

Lada’s top brass can give credit to a very Western product strategy.

At the end of 2017 Lada had the country’s top market share, with 19.5 percent of all car and light commercial vehicles sales sold. That’s an increase of 1 percent from 2016. The brand’s domestic retail sales topped last year’s figures by 17 percent in a market that grew by 11.9 percent. Fleet sales rose 32 percent, with exports to other markets — including newcomer China — rising some 44.5 percent.

While the past several years looked especially dire for the industry, the brand’s recent product push was set in motion with the hiring of chief designer Steve Mattin in late 2011. The British-born Mattin, whose background includes top design posts at Mercedes-Benz and Volvo, set about sculpting a new generation of vehicles. The compact Vesta sedan appeared in late 2015 for the 2016 model year, joining a car lineup that included the older (and cheaper) Granta, Kalina, and Priora. In early 2016, the Xray compact crossover debuted.

Lada built on the success of the modern-looking Vesta with last year’s introduction of the Vesta SW wagon and lifted, cladded SW Cross. Yes, Lada has a “Cross” of its own, though this soft-roader is only available in front-drive. It’s a product strategy that resembles Ford of Europe’s small car plan, where one model spawns multiple variants up to and including a faux crossover.

Vesta sedan sales rose 40.1 percent in Russia last year. The Xray, which went on sale in February 2016, saw its volume increase by 67 percent. Apparently, Russians really dig scalloped fenders. If you’re wondering, rest assured that one Cold War warrier still lurks within the brand’s lineup — the Lada 4×4, formerly the Lada Niva, which soldiers on with its unmistakable profile and 1.7-liter engine intact. There’s also a five-door version now.

According to Reuters, Avtovaz president Nicolas Maure expects Lada sales to grow by at least another 10 percent in 2018. Thanks to rising sales and a cost-cutting blitz, the company’s revenues rose 22 percent in 2017, with its net loss shrinking from $790 million to $171 million. The goal for this year is to reach a positive operating margin.

[Images: Lada]

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19 Comments on “Lada: Financial Learnings of Avtovaz for Make Benefit Glorious Nation of Russia...”


  • avatar
    Tstag

    It’s curious that Dacia, Lada and Nissan are all seemingly thriving whilst the Renault brand seems to be going backwards in Europe. The French government and Renault took some clever decisions when they effectively bought Nissan and you have to give them credit for that.

  • avatar
    npaladin2000

    Knowing Russia, I hope they all come with a built-in breathalyzer.

  • avatar
    dal20402

    Question for gtemnykh (and anyone else who may know): do these modern-day Ladas have the same advantages in ease of servicing and relative tolerance of crappy conditions as their predecessors?

    • 0 avatar
      slavuta

      I would think – no. They are most likely built from same parts made in same factory as every other car. I wouldn’t be surprised if engine and transmission are imported. Here ya go: https://en.wikipedia.org/wiki/Lada_XRAY

      • 0 avatar
        dal20402

        Well, the old Ladas were also based on Fiats, but with changes to better suit the Soviet-era Russian market. I can imagine that the people in Togliatti would do similar things to the Dacias/Nissans they’re starting with now.

        • 0 avatar
          slavuta

          Old Ladas were not just based on Fiats. They literally used equipment that was used to build Fiats. But components were built in Russia. Here we talking of modern car that is built in modern way. Parts most likely come from all over and assembled in Russia

      • 0 avatar
        Onus

        The engine and transmission are domestically produced.

        These things would cost way over $10,000 if they had to be imported. Russia has done a halfway decent job on getting suppliers in place after they jacked the tariffs on new and used cars following the financial crisis.

        Before that the country was a dumping ground for used American, European, and Japanese new cars.

        The vesta has an avtovaz developed platform. If its anything like the Granta its pretty simple and easy to work on ( from personally looking one over ).

        The vesta has an avtovaz developed platform. If its anything like the Granta its pretty simple and easy to work on ( from personally looking one over ).

    • 0 avatar
      Malforus

      They are still selling a branch of Lada’s modeled on the Niva:
      http://www.lada.ru/en/cars/4×4/3dv/about.html

      So yes if you buy the car on their website that looks like it hasn’t evolved since Reagan you can get a LADA with the 0 F’s attitude required for non-urban russia.

  • avatar
    Sub-600

    I’m waiting for the Hellcat Lada.

  • avatar
    darex

    Is this essentially just a LADA version of the Captur or Juke?

  • avatar
    Stumpaster

    Strategy? Tank the ruble, make people poor, tarrifs, now they can’t afford fancy shmancy Hyundais, Lada wins and gains market share. Hail Putler!

  • avatar
    indi500fan

    Those “side scallops” are a unique styling line, not crazy about them visually but it is something different…and they probably make the panels robust.

  • avatar
    Big Al from Oz

    I wonder if the car was designed in one of those independent Chinese car studios.

    The grille, headlights, and front end look very China orientated.

    For those who don’t know China has a group of independent car design and engineering studios. As a manufacturer you approach the vehicle designers and presto in 15 months or less you have a vehicle rolling off the production line.

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