Why “AVTOVAZ” began to lose market share

“AVTOVAZ” sold in Russia in 2021 350,714 cars, which is 2% more than in 2020, told reporters on January 12, executive vice president of sales and marketing Olivier Morne. The entire market of new passenger cars and light commercial vehicles (LCV) in Russia, according to Avtovaz, in 2021 grew by 5% to 1.68 million cars. Accordingly, the company’s market share decreased by 0.6 percentage points. up to 20.9 percent.

According to AvtoVAZ, Lada Vesta has become a model leader of the Russian market. The car had a circulation of 113,698 units, market share was 6.8% (0.1 percentage points by 2020). In second place – Lada Granta. In 2021, 111,430 such machines were sold in Russia, the market share of the model was 6.7%, down 1.2 percentage points. to the previous year. This happened due to the shortage of microchips faced by AVTOVAZ and other automakers, according to the company’s presentation (available in “Vedomosti”).

Also in 2021, “AVTOVAZ” sold 50,114 Lada Largus, 51,242 cars of the Niva family and 12,696 commercial Lada cars on various chassis, according to the presentation.

AvtoVAZ was the first Russian automaker to experience a global shortage of microelectronic components in 2021. The plant in Togliatti suspended assembly in summer and autumn due to a shortage of Bosch microchips. Car dealers interviewed by Vedomosti said at the time that these unscheduled pauses had led to a shortage of the most popular Granta and Vesta models. Lada Vesta cars are assembled by AvtoVAZ’s division in Izhevsk. This plant did not stand idle in 2021 due to a shortage of components for assembly, unlike the Granta production line in Togliatti.

Due to the shortage of chips, the automaker temporarily stopped equipping its vehicles with Era Glonass emergency call modules in the second half of September. The brand’s dealers said that AVTOVAZ had informed the sellers about the need to conclude an additional agreement with customers stating that these modules would be installed no later than mid-2022.

In addition, “AVTOVAZ” planned from mid-November 2021 to oblige dealers to sell cars only with additional equipment from the plant – to support sales. The FAS then explained that this meant the introduction of new car kits, i.e. no bans on the sale of cars without new equipment are planned.

According to Morne, the situation with the shortage of microelectronic components should improve by the second half of 2022.

Speaking about what the car market might look like in 2022, Morne noted that it is difficult to name specific figures because so many parameters will affect it. “What we now pre-cautiously feel is that there may be a small increase to 1.75 million pieces. This is such a basic forecast, ”the top manager said. He did not disclose data on Lada’s projected sales in 2022, but noted that the main task of the company – to maintain market share of at least 20%.

The reason that AVTOVAZ slightly lost market share is not that the demand for their cars has fallen. The reason – in problems with the supply of components, microelectronics. Now there is a demand, the question is whether the producers can satisfy it, ”VTB Capital analyst Uladzimir Bespalau told Vedomosti. According to the expert, the dynamics of sales of AvtoVAZ in 2022 will not differ much from the dynamics of the market and will remain at 2021. According to the results of the whole year, the market will remain plus or minus at the level of 2021 and AvtoVAZ “will show about the same dynamics,” – said Bespalov.

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