Vladimir Shlyomin

Famous Tiger (front) with standard-made UAZ behind it

Not so long ago the Gorkovsky Avtomobilny Zavod (GAZ) wheeled out to the Moscow Motor Show a heavy multi-purpose cross-country vehicle with the plant’s index GAZ-2975 and the aggressive name of the Tiger.
The maker of the Volga passenger car, which has been famous in Russia since the 1950s but which is now outdated, declared its intention to develop this type of automobile. Thus, by doing so, GAZ dared to challenge AM General, the recognized authority with its famous Hummer.

JUST A FEW COPIES...
The automobile really impressed motorcar enthusiasts. The practically complete absence of body overhangs and a 450 mm road clearance secure its high cross-country capability. The strong chassis frame of the ladder type is made of special steel with increased strength properties. Tiger, which is designed as a high-speed automobile, has independent torsion suspensions of front and rear wheels. As a result, weighing 4.5 tons it can make up to 160 km an hour on an asphalt road. Tiger has a six-cylinder in-line turbo-Diesel engine of the Cummins B-180 type.
Vladimir Churaev, the GAZ deputy general director for development, reported "much interest" shown in the new automobile by "defense agencies of Egypt, Ethiopia, Turkey" as well as by "FNSS, the company that makes light armored cars with aluminum bodies". According to Vladimir Churaev, these partners "are ready and willing to jointly develop an armored vehicle".
His statement might be considered encouraging. However, customers of the Russian automobile industry have long been used to disappointments.
Tiger is no exemption. The automobile remains an even more rarity than the Amur tiger, its biological prototype recorded in the Red Book. Just a few copies of it were made. There are several reasons for this. First, it is the price. Although Tiger is by 30% to 40% cheaper than Hummer, the price of $50,000 or $60,000 is high for a Russian consumer, let alone the country’s army. Second, it is Tiger’s dependence on foreign components. Diesel engines with each cylinder having the displacement volume of one liter are not produced in Russia yet. Their production may start in 5 or 6 years. All this means that AM General has no fear of Russia.
Russian motor shows quite often demonstrate models that draw much attention. For example, last year UAZ (the Ulyanovsky Avtomobilny Zavod incorporated now in the Severstalavto Group) presented Bison, an elegant five-seat station wagon. Its price, which is comparatively low for automobiles of this type, is even more attractive and the producer is promising to keep it under $10,000. The commercial production of this model will not start before 2004. KamAZ displayed Oka, the midget cabriolet, with a price of about $3,000. Avtoselkhozmash-holding is advertising its Mishka, a family car having a composite energy installation (a combustion engine plus a battery) and a body made of framework with plastic panels. As its designers insist, such a combination helps increase the guaranteed corrosion-resistance of panels to 10 years. The car’s power plant of 53 hp meets the Euro-2 safety requirements and in the future it will satisfy the Euro-3 safety requirements as well. Its price will be in the region of $2,500.
But... despite of their consumer advantages those models may not have gone further that motor shows, at least for the time being.

ON THE OTHER HAND...
The association AvtoVAZ has remained the leader of the Russian automotive industry for many decades. Built over 30 years ago with the assistance of Italy’s FIAT this automobile plant in the city of Samara conquered and still retains about two thirds of the Russian automotive market. AvtoVAZ practically has no rivals in Russia. However, with every passing year it becomes harder for AvtoVAZ to withstand the competition of foreign companies.
In 2002 Russia produced 981,000 passenger cars and imported about 700,000 cars or almost 20% more than in 2001. Approximately half of them are used cars made before 1995. But even such cars turned out more preferable to consumers than technologically outdated models of AvtoVAZ. As a result, their production began to go down. Quite a few times AvtoVAZ and GAZ were forced to stop their assembly lines since their yards became overstocked.
Experts are predicting significant changes in Russia’s automotive market in the foreseeable future. The market niche for cars costing between $10,000 and $15,000 will increase from 8% to 23%. At the same time 42% of cars will be bought for prices ranging from $6,000 to $10,000. So, the most intense competition will develop in this very niche because novelty cars of AvtoVAZ, GAZ and UAZ as well as Russian versions of popular foreign models assembled at new production enterprises are supposed to be within such price ranges.

AvtoVAZ has been making Niva for 25 years already

So as to retain the control of the market, Russia’s automotive plants will have to make no less than 1.4 million modern and inexpensive automobiles. However, the problem is that there are no basically new designs of engines and major components. And it is simply impossible to start a commercial production of even a perfectly developed model without them.
Meantime, as in other countries, the automotive industry in Russia has a serious impact on many economic processes. There are about 250 large as well as medium-sized enterprises and organizations employing 800,000 workers. And taking into account their close cooperation with enterprises of the electrical, metallurgical, chemical and other industries it means that, figuratively speaking, a Russian automobile ‘employs’ around 5 million people.
It was obvious that Russia’s government had to take urgent measures. They resulted in working out the Concept of developing the automotive industry.

HOW MUCH IS "PERESTROIKA" WORTH?
The Concept provides for a whole complex of measures. Among other things, they include setting up new production facilities and close cooperation with foreign auto giants capable of arranging in Russia not a "screwdriver assembling" of their models but an actual production. Due to different reasons, the implementation of these plans is being postponed. In the meantime, protectionist measures have already been put into effect. In 2002 import duties were raised, the import of used cars made more than 7 years ago was virtually banned because a consumer would have to pay double the price.
When making such an unpopular decision, the Russian government thought that a temporary import restraint could help Russian automotive plants brace up, upgrade the technology and speed up producing new models of automobiles. However, they are again losing a chance offered to them.
In principle, GAZ has nothing to boast about. Different modifications of that same Volga (the models GAZ-3110, GAZ-3111 and GAZ-3111), either standard-made or specialized, fail to attract buyers. This is well understood at the company Ruspromavto, which owns the plant. That is why it counts on making passenger minivans and mini-trucks of the Gazel model, which are in continuous demand in the market, sell them.
UAZ makes mostly unsteady and uncomfortable cross-country vehicles. According to the plant’s officials, a new engine is needed for its further development.
All hopes are pinned on AvtoVAZ but it also is in no hurry to upgrade its production. A recent study proves that the standard price list of the plant’s dealers is based on models that have been on the market for 5 to 15 years. As the plant’s officials report, in the nearest five years AvtoVAZ will focus its production and marketing policy only on making cars of "the tenth family" (the base model VAZ-2110), which was started 7 years ago.
The analysis of market developments shows that prices of Russian automobiles will be steadily growing and, sooner or later, they will catch up with prices of foreign models. Expected trends make it necessary for Russian producers to develop a modern and preferably inexpensive automobile. AvtoVAZ intends to come up with such a car, which is called Kalina. Its commercial serial production is planned to start in 2004. However, in order to start AvtoVAZ needs $800M. The plant can invest only $350M and it has to look for the rest of the funds elsewhere.
The Russian automotive industry undoubtedly needs reform. But no reform is taking place so far. All that has happened is the artificial reduction of the market competition through customs barriers. By the way, AvtoVAZ made a good use of this: despite falling production volumes, its profits keep growing.
To conclude, an interesting quotation comes to mind that could easily apply to Russia today:
"Our carmakers cannot compete in world market because plants’ equipment is much depreciated and the technology as well as methods of production fell considerably below the level of developed countries. That is why I strongly recommend to stop making automobiles at home, especially passenger cars. As far as design, field-performance data and longevity are concerned, the gap between our cars and the imported ones amount to 20 or even 30 years. Taking this into account, I think that importing passenger cars would be the right decision".
Nishio Suehiro, the General Secretary of Japanese Cabinet, 1950.