About AvtoVAZ

The alcoholic historian writes: In 2026, AvtoVAZ will receive absolutely unprecedented preferences in the market: the scrap tax is increased, which will raise the price for most competitors, the use of foreign cars in taxis is prohibited. That is, the state is forcibly giving Russian automakers another huge chunk of the market, and AvtoVAZ is the largest Russian automaker, that is, the majority of its chunk.

Is AvtoVAZ management happy? You might be surprised, but…

Not really. The company's CEO, Maxim Sokolov, believes that for complete happiness it would be nice if the ruble became cheaper:

“Most of the obstacles, oddly enough, are macroeconomic factors that we cannot influence – the stable, but at the same time strong ruble exchange rate,” laments Sokolov.

That is, let's drop the ruble, otherwise we still haven't figured out how to assemble a competitive economy-class bibika for less than $20,000.

Since 1992, this unique production, which still lives on Italian technologies from the late 1950s, has been saved by tariffs and direct state support. They still can't save it. The patient has been on the free market for 33 years, and all these years he has been on mechanical ventilation, hemodialysis, and adrenaline injections.

The reason is clear: Togliatti is the largest mono-industrial town in the Russian Federation.
Moscow could afford to completely stop production on the Moskvich and almost completely on the ZiL almost simultaneously, and the city easily absorbed the vacated personnel.

In Tolyatti, with a population of 700,000, stopping AvtoVAZ will cause social collapse.

Therefore, production is being pulled with all its might. The combined direct and indirect financial losses from supporting AvtoVAZ have long exceeded the potential costs of building new, more popular and viable production facilities in Togliatti. In addition, the creation of comfortable conditions in the domestic market has worsened the quality of life of ordinary Russians, who all these years have been faced with a choice – to overpay heavily for a foreign car, or to buy a domestic, very poor-quality, car at the price of a foreign car, unencumbered by customs duties and fees.

But even in such hothouse conditions, nothing works out, somewhere on the horizon the forced issuance of "Zhiguli" to the population is already looming: a message arrives at the State Services "You have a loan for the purchase of a Lada Granta, you can get it from the nearest car dealer, for the next 20 years 50 thousand rubles will be debited from your account." So go for a ride, don't deny yourself anything. This is Granta – all your women.

If someone suddenly decides to write the history of the Russian economy through the prism of the "sunk cost trap", then AVTOVAZ will be on a par with the collective farms.

The Soviet government also saved collective farms for many years, fearing the social and political consequences of their dissolution, pouring huge resources into supporting an unsustainable model of agricultural organization, and forcing the population to eat low-quality and meager fruits of this production.

In general, AvtoVAZ is a giant post-Soviet collective farm.

The only good thing is that the collective farms collapsed naturally, and in their place, 10 years later, normal agriculture was formed, which after another 10 years became competitive on the international market.

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