GM AvtoVAZ

Project History

On June 27, 2001 representatives of General Motors, AVTOVAZ and European Bank for Reconstruction and Development signed the General framework agreement on creation of the enterprise. The joint venture was created at a constituent meeting on July 30, 2001 and received registration in the Ministry of Justice of the Russian Federation on August 2, 2001.

Workforce recruiting began since August 27, and construction works – since October, 2001.

The contribution of the parties to authorized capital of the joint venture was 238.2 million US dollars:

• General Motors – 99.1 million in cash and the equipment (41.61%);
• AVTOVAZ – 99.1 million intellectual property (patents, certificates and a trademark for the NIVA car, model 2121), the engineering systems, buildings and constructions (41.61%);
• The European Bank for Reconstruction and Development (EBRD) – 40 million dollars in cash (16.78%) and the credit of 100 million dollars.

2019: General Motors sold to AvtoVAZ a share in the joint venture and finally left Russia

On December 9, 2019 the Federal Antimonopoly Service (FAS) announced issue to AvtoVAZ of permission to the redemption of a 50 percent share in the enterprise, joint with General Motors — GM AvtoVAZ. As a result of this transaction the American carmaker finally abandons the Russian market.

No changes for the staff of both companies are planned. All current contracts with suppliers and the dealer centers Niva will remain in force throughout all transient period. Also in the long term the GM AvtoVAZ company will be renamed.

The plant belonging to the joint venture temporarily will continue release and sale of Niva under the name of Chevrolet. However over time this car will receive the Lada logo.

For GM the Russian market not strategic, in due time they stopped all projects, except the joint venture with AvtoVAZ. At the same time now there is a question of updating of a lineup of the joint venture that will demand investments — the analyst of VTB Capital Vladimir Bespalov explained.

The GM AvtoVAZ company was created when AvtoVAZ was not under control yet of alliance Renault Nissan which competes globally with GM, the expert reminded.^[1]

Investments

Total investment in the project is 338, 2 million US dollars.

From them:

• 82.3 million – money;
• 63.6 million – intellectual property;
• 92.3 million – equipment cost;
• 100 million – the credit of the EBRD.

Production

The total area of the joint venture is more than 142 thousand square meters. Production capacities include:

• workshop of assembly of a black (unpainted) body;
• workshop of finishing assembly of a black body, including, the line of stamping of parts of a body (on AVTOVAZ), the line of welding of a framework of a body (on AVTOVAZ);
• workshop of coloring;
• workshop of assembly and non-productive departments;
• expedition (preparation for shipment of cars);
• administrative building.

At operation on construction and a design of placement of the equipment two general contractors were involved:

• QuattroGemini Ltd (Finland) with 7-year work experience in Russia was responsible for construction of buildings and a supply of necessary networks;
• Eisenmann (Germany) - the general contractor by a technology part and the builder of workshop of coloring.

Project management and engineering support were performed by the American firm "Hanscomb" supervising many construction projects worldwide. At the Hanscomb market of Russia there are more than 10 years. Also at a stage of construction about 1000 builders and more than 30 companies from Togliatti were involved.

On September 23, 2002 rolled the first Chevrolet NIVA car off the production line of the joint venture - the comfortable, reliable and safe Russian SUV which won recognition of motorists. Entry of the company into the Russian market was mentioned by the Grand Prix of the Za Rulem magazine in the Break of Year nomination at once. Since then Chevrolet NIVA is in stable demand for consumers. The market received a modern qualitative competitive product.

In September, 2004 the enterprise put in production the new front drive Chevrolet VIVA car of class "C" which is based on the Opel Astra T-3000 platform which by right became at that time one of the best European cars.

Since January, 2006 assembly of trial consignment of the Chevrolet NIVA GLX cars with the FAM1 engine of 1.8 l., new transmission, ABS, the conditioner and safety cushions began. According to test results on security according to the European standards of EuroNCAP the car received 4 stars.

In March, 2009 production of upgraded version Chevrolet NIVA began. For improvement of quality of the released product in construction of the updated car more than 60 engineering changes were implemented.

In May, 2010 production Chevrolet NIVA of advanced construction began. The made changes promoted decrease in the overall level of noise, improvement of smoothness of the course and controllability of the car. The most important improvements promoting considerable decrease in noise level and vibration in inside of the car should be considered replacement of driveshafts with power shafts with hinges of equal angular speeds and the transfer case with double-row bearings of output shaft. On August 1 on Dzhi Em AvtoVAZ Ltd production of the Chevrolet NIVA cars of complete sets of GLS and GLC equipped with the core banking system (the anti-lock braking system of brakes) of Bosch company and safety cushions of TRW company began.

Adaptation and resource tests of Chevrolet NIVA with "security packet" were successfully carried out in Russia, Sweden, Germany and Spain.

In 2002 rolled 456 cars off the production line of the joint venture, in 2003 - 25,235, in 2004 – 55150.v 2005 - 51810, in 2006 - 47881, in 2007 – 55052, in 2008 - 54,654, in 2009 - 23101.

At the end of 2010 rolled 36996 Chevrolet NIVA cars off the production line of joint venture that for 60.15% exceeded indicators of 2009.

In total since the beginning of production 348425 Chevrolet NIVA cars, including to the CIS countries — 29507 are implemented (data on 1/1/2011).

Today sales of cars of Chevrolet NIVA perform 149 dealers in the Russian Federation, 8 dealers and 3 distributors in the CIS countries.

According to Association of European Businesses in the Russian Federation at the end of 2004-2008 Chevrolet NIVA became the most sold SUV in the Russian market. And in 2006 it was conferred the award "The SUV of Year — 2006" in the class "Compact SUV".

Personnel

One of the main objectives of GM-AVTOVAZ is providing the enterprise with qualified personnel. For this purpose the company cooperates with a number of the recruiting agencies, as in Togliatti, and other regions of Russia assisting in personnel recruitment. At emergence of a vacancy the relevant information with requirements to the candidate for a position is placed in the company in the general access to give an opportunity to the interested staff of the joint venture to take part in selection. The decision on the choice of the candidate is made based on an interview jointly by the head of the structural unit and the representative of directorate on personnel.

As for personnel training, in 2010 on GM-AVTOVAZ "the simulator of the pipeline line or modeling of workflow" for the purpose of training and adaptation of again accepted employees and for additional more complete acquaintance of already working personnel with production organization was started. It is the educational environment imitating work of a production line for GM-AVTOVAZ where the employee learns about the standardized work and rules of "the built-in quality". Also the training is directed to training in skills of team work, finishing the purposes and values of the organization in the practical form as close as possible to reality.

The company actively develops personnel, training and improving its skills. The main direction of planning and the organization of annual types of training is the strategy focused on requirements of the organization. For example, in 2010 the leadership team and key experts of the enterprise were trained on the subject "Conflict management".

The company continues to involve actively in training internal resources – the specialists who are experts in the area.

As of January 1, 2011 the total number of personnel of GM-AVTOVAZ is about 1400 people.

Innovations

As well as at all plants GM production process in the company is based on the basis of implementation of a flexible system of GM-GMS which provides low-cost resource-saving production and as much as possible reduces costs of any sort, providing high quality of products. It is reached not only due to the most strict incoming and output inspection, but also the fulfilled system of the typified procedures of such control and also corresponding training and motivation of personnel. With

On July 1, 2002 at the enterprise it is entered and successfully the modern system of automated management – SAP works.

Policy in the field of environmental protection

The policy of Dzhi Em AvtoVAZ Ltd in the field of environmental protection

• prevention of environmental pollution;
• implementation of activity according to requirements of the legislation in the field of environmental protection, the requirements of a System of management of the environment of Dzhi Em AvtoVAZ Ltd and other requirements applicable to ecological aspects of the enterprise;
• permanent improvement of a System of management on environmental protection;
• rational use of natural resources;
• the requirement from all personnel of the company of an implementation of works according to the existing rules and regulations of environmental protection;
• personnel training for the purpose of increase in level of his ecological consciousness and understanding of the personal liability for state of environment;
• organization of work on the principle: it is simpler to expect and prevent pollution, than to eliminate its effects;
• planning and control of ecological indicators of the activity for the purpose of decrease in impact on the environment.

Main objectives

• Improvement of culture of production;
• quality improvement of products;
• building confidence of the western companies in the Russian business;
• further attraction of modern technologies and investments into automotive industry, including, through creation of the joint venture for production of component parts;
• creation of modern dealer network.

Thus, the main objective of the enterprise consists in taking the place of the full producer of cars, high-quality, competitive, available at the price, in the markets of Russia and the CIS countries.