Monday, March 7, 2016

Cars. We Have Cars to Sell. Please Buy Cars

      Such is the lament of the Russyan auto industry.  This recent decline in domestic auto sales in Russya is another indicator of the ongoing recession caused by weak energy prices on which so much of Mad Vlad's economy is dependent.  Investors in AvtoVAZ are very concerned about the decline in sales.  Duh.  Don't these investors read anything?  Maybe they are TRUE Russyans: they believe what they are told by the Kremlin's house organs( RT, Rossyskaya, Moscow News, RBTH).
     Let's compare auto sales in a few other nations:
Spain +20.9%
  1. Italy   +15.5
  2. France  +6.8%
  3. UK     +6.3%
  4. US       +5.8%
  5. Germania 5.6%
      6. China   -2.5%      7.RUSSYA  -35.7%
      Units sold in Russya are 1.6 millions, or less than the amount sold in all of Italy's 1.7 millions.  Clearly, there is a marketing problem heaped on top of weak demand, heaped on top of fear, heaped on top of unemployment, heaped on top of a chief executive who cannot figure out a solution.  The CEO, Bo Andersson, is caught in a crossfire from top shareholders and weak markets for his products.   What to do?   Nissan and Renault own more than half the company and they are not happy about the state of the company.   Will the oligarchs come calling?  Certainly, they are circling this stricken fish, ready to bight off its "head", and take the company private as they have done with all those state -owned entities in the early 2000's.  AvtoVAZ officials say they need a bailout.  Hmmmm.
Maybe Renault and Nissan should call on Bob Dudley, current head of BP PLC.   He was former head of a joint UK/Russyan venture until he was forced out by harassment and failure of the Kremlin to renew his work visa.  Gotta love the Kremlinistas: they know how to deal with foreigners of all colors.   
   Who wants to buy a LADA car?  Nobody, that's who.  Lada sales are down 31% over last year.  Mr. Andersson laid off 10's of thousands of workers and made new deals with suppliers.  Still, it was not enough.   Maybe Mr. Andersson should go to Ukraine or Crimea or Syria or Kamchatka to ask consumers why they aren't buying his product.   Maybe it's a waste of time.
        Welcome to Mr. Putin's version of 21st century Russya.ploughshares.org 
 

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