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Monday, 11 July 2011

Soviet automotive relic enjoys revival

Journal Gazette
July 10, 2011

Lada, the car of the Soviet proletariat, survived the transition to capitalism and is now expanding to fend off General Motors and Fiat two decades after the collapse of communism.

Lada’s parent OAO Avto VAZ, which is 25 percent-owned by Renault, plans to invest about $5.4 billion to introduce seven models in the next three years. The cars will in some cases replace vehicles that were developed before Mikhail Gorbachev came to power in 1985 and presided over the collapse of the Soviet Union.

Lada, Russia’s dominant brand with a 24 percent market share, is under pressure to defend that position. GM, Volkswagen and Ford are pushing into the market, which is poised to become Europe’s largest within three years. GM has an 8.9 percent share and VW 7.5 percent, with both reporting faster sales growth than Lada in the first five months.

The Russian carmaker’s hopes rest on customers like Sergei Chernikh. The 35-year-old retail manager from Voronezh, about 440 miles south of Moscow, bypassed Fiat and Chevrolet models to buy a Lada 2107 sedan because it was cheap and easy to maintain.
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