VAZ refused from Europe. While temporarily

12 April 2019

Deliveries of LADA cars in the EU are terminated due to tightening environmental regulations

The press service of AVTOVAZ announced that export deliveries of LADA cars to the territory of the European Union (read Germany – ed.) temporarily ceased due to tightening environmental regulations (in September of this year in the European Union begins to operate standard Euro 6d-Temp).

In an interview to the press service of AVTOVAZ for RBC, it was stressed: "In connection with toughening of environmental norms in European countries, we adjust our export activity in the region. There is no doubt that at some point we have to leave them for a while". Delivery to Germany will be phased out in April–may and then likely in other EU countries. 

The main Russian automaker still expects in the future to go back to the European market with a new model: "we Have plans to create in close cooperation with our partners of the Alliance (Renault-Nissan – ed.) global model and return to these markets."

At a press conference at the end of 2018 in January of this year, Executive Vice President for sales and marketing of the group, Jan Ptacek said that the export of LADA cars increased by 57% to 38 thousand, so the growth to 2017, amounted to almost 30%. Traditional export markets for AVTOVAZ remain: Kazakhstan, from 13.1 million (+51%); Belarus-from 10.4 thousand (growth in 2.8 times); Uzbekistan with 2.6 million (growth in Q4,6 times). In addition, last year saw exports to Turkey, Tunisia, Chile, and Cuba. In February of this year, it was announced that AVTOVAZ is negotiating the beginning of the supply of cars to Iran. Just at the moment the LADA brand comes in 34 countries.

Comment: frankly, AVTOVAZ is not the first time drops out from the European market due to environmental and other restrictions on its products. In previous times it was, I remember because of the lack, which became mandatory air pressure in the wheels (TPMS). Earlier AVTOVAZ export to the EU and EFTA froze up due to the introduction of environmental regulations, respectively, Euro VI, Euro V and Euro IV, but every time Togliatti was able (albeit with a certain voltage) to overcome the new higher bar of requirements on ecology and safety.

Premiere of LADA Vesta was a long time ago and, although demand in Germany is growing, but to adapt the model to new, more stringent EU requirements on ecology too expensive

And here, once again, in fact, see the same "rake", which is actually not surprising – even the most fresh Russian model of Vesta by European standards, is not so new and to pull the level for the new European requirements, too expensive.

SUV LADA XRAY outside the vehicle is not delivered according to the policy of the Renault-Nissan Alliance, so there is no doubt that a new "global" model will leave third world countries

However, the bulk of exports of AVTOVAZ and Europe still accounted for the SUV LADA 4x4, which design has passed the fifth decade (!).

Permanent export bestseller of AVTOVAZ – LADA 4x4, obviously already exhausted all physical limits for modernization under the requirements of the EC. So in Germany the demand for "Niva" fell in the first quarter by 10% to 371 units.

So that is more or less available for LADA are only the markets of Neighboring countries (ie the former Soviet republics from the usual to the production of Togliatti from the time clientele) and third world (the middle East and Latin America) with less stringent laws and less demanding consumers who just need more cheap, simple yet hardy car adapting to the bad roads. However, exports to the EU was for AVTOVAZ subject to corporate pride, and part of the marketing policy to improve the prestige of the brand, which is now due to the ban on the sale in the EU finally gets on a par with many Chinese counterparts and, accordingly, is forced to fight them in approximately the same regions of the world. The emergence of new "global" model is still in the future and it is still unknown as is the time to turn things inside the Alliance because "of the case Carlos Ghosn". In any case, to imagine that Renault which already has Europe's budget brand Dacia or Nissan, respectively, from Datsun, will actively promote and even Russian LADA, and even at the present openly negative "sanctions" Russia's image in General seems very, very optimistic..