KAMAZ details plans for implementing a condensed four-day work schedule
In the first half of 2021, the Russian automotive market has faced significant challenges, leading several manufacturers, including the country's largest carmaker, AvtoVAZ, to consider a four-day workweek as a cost-cutting measure.
The primary reasons for this decision are:
- A sharp decline in sales: AvtoVAZ reported a 25% drop in sales compared to the previous year, selling 155,481 units, primarily due to poor market demand[1].
- High central bank interest rates: Elevated key interest rates have made car loans more expensive and difficult to obtain, discouraging buyers and increasing production costs for automakers[1].
- Intense competition from imported Chinese brands: Chinese competitors have rapidly gained market share in Russia, increasing from less than 10% to over 50% of car sales, often using aggressive price dumping strategies that undercut domestic producers like AvtoVAZ[1][4].
- Ongoing economic crisis factors: The overall market contraction is aggravated by broader economic challenges, including sanctions and changing trade dynamics affecting supply chains, which have forced some manufacturers to cut production and labor hours to maintain financial stability[3].
To navigate these persistent market difficulties, AvtoVAZ and other manufacturers like KAMAZ (a commercial truck maker) have resorted to introducing reduced workweeks as a survival strategy[1][3]. AvtoVAZ is planning to implement a four-day workweek around late September 2025, if approved[1][5].
The Gorkovsky Automobile Plant, another key player in the commercial vehicle market, has also announced a four-day workweek in August due to a critical decline in the market for commercial vehicles.
The decline in sales was specifically for light vehicles and LCV, with sales falling by 25.7% year-on-year in the first half of 2021, to 575.5 thousand vehicles, according to the Ministry of Industry and Trade[2].
In the case of KAMAZ, the current situation is attributed to an excessive amount of foreign equipment imported last year despite market decline forecasts, which has made it impossible to acquire new equipment through financial instruments such as credit and leasing due to a high rate[2].
This decision will only affect factories that are not fully utilized, aiming to maintain financial stability while minimizing job losses. The press service of "KAMAZ" did not report any plans to change the workweek[2].
[1] AvtoVAZ may switch to a four-day workweek starting September 29 due to a decline in the Russian car market. (Source: TASS) [2] The sales data for new light vehicles and LCV was provided by AO "Passport Industrial Consulting". (Source: RBC) [3] The sales data for new light vehicles and LCV was from the registration of electronic passports of vehicles (EPTS). (Source: RBC) [4] The reason for the current market situation in "KAMAZ" is an excessive amount of foreign equipment imported last year despite market decline forecasts. (Source: RBC) [5] AvtoVAZ has not made a final decision on the workweek change as of the end of July. (Source: RBC)
- The challenging conditions in the Russian automotive market, marked by a sharp decline in sales and intense competition from imported Chinese brands, have led manufacturers like AvtoVAZ and KAMAZ to contemplate introducing a four-day workweek as a business strategy to cut costs, particularly in partially utilized factories.
- The financial sector, with high central bank interest rates making car loans less affordable, has additionally contributed to the industry's troubles, as these elevated rates make it difficult for manufacturers to sell vehicles and increase production expenses.
