AvtoVAZ Strives to Find Sales, Profits

OAO AvtoVAZ CEO Bo Andersson tells Bloomberg News the Russian maker of Lada cars hopes to break even this year after removing 12,800 workers and eliminating four levels of management.

The brand's market share so far this year has slipped to 15.7% from 16.9% in 2013. Andersson declares AvtoVAZ will capture 17% of the market by year-end. The company aims to lure buyers back with a bevvy of new models co-developed with the Renault-Nissan alliance, which will gain control of the company with a 74.5% stake this year.

The trio have set a goal of capturing a combined 40% share of the Russian car market in 2016. Renault and Nissan have lowered the proportion of contribution they expect from Lada, saying they will make up the difference with stronger gains for their own brands.

In January-July, Lada sales fell 16% to 220,800 units, according to the Moscow-based Assn. of European Businesses. In the same period, Renault sales dropped 9% to 111,600 vehicles and Nissan sales surged 21% to 94,500 units.

Andersson arrived as CEO in December from his previous assignment as CEO at Russian truckmaker OAO GAZ. A relentless turnaround expert, he has cut "unnecessary bureaucracy" by shrinking the number of management layers to five from nine. Bloomberg says he also has cut production costs 30% by launching efficiency programs and standardizing internal systems.