Expectation vs reality
In an interview with the newspaper, he said that Moskvich recorded a loss of 160 million rubles at the end of 2023 “Vedomosti” KamAZ General Director Sergei Kogogin. This company is the technological partner of the Russian automobile plant.
Breakeven threshold according to Kogogin (production volume at which the business covers its costs but does not make a profit) 40 thousand cars per year for Moskvich. At the same time, the general director of KamAZ admitted that the desire to realize the previously announced plan to produce 50 thousand vehicles in 2024 is inappropriate for the Moscow plant.
“No, because it is absolutely not necessary. The break-even level is reached by 40 thousand cars per year. “We are targeting 30-35 thousand vehicles this year,” he said.
Considering these indicators; There is a risk that Moskvich will remain unprofitable in 2024.
The auto factory has repeatedly adjusted its 2024 production plans. Last August, it was announced that it would produce 44 thousand cars. Moskvich production director Oleg Maslyakov at the end of November 2023 reportedIt is stated that the production plans for 2024 are 50 thousand vehicles.
At Moskvich, Moskvich 3 gasoline crossovers with manual transmission and CVT, Moskvich 3e electric crossovers and Moskvich 6 liftbacks are assembled using the large knot method.
also plant announcedIn a few months, they will start small-unit assembly of the Moskvich 3 model with welding and painting of the bodies. The cars will be assembled from more than 900 components; they are currently assembled from 50 components and parts.
As Kogogin noted, the transition to small-unit assembly will require additional investment of 4 billion rubles, which will be provided through equity financing or in the form of borrowed funds from banks. Small unit installation will save you 150 thousand rubles per car.
Who buys Moskvichi?
Of the 31 thousand Moskvich cars produced in 2023, less than half were sold – 13.5 thousand cars. Another 19 thousand “Muscovites” were sent to dealers. The share of sales of these machines to government institutions is approximately 10%. reported analytical agency “Avtostat”, citing the press service of the plant.
So, in March 2023 the first “Muscovites” filled traffic police fleet. Especially the Moskvich 3e electric car entry Serving in the traffic police of Lyubertsy near Moscow.
One hundred new Muscovites in July 2023 transferred Moscow units of the Russian Guard. The cars have also entered the service of the Federal Penitentiary Service and are widely used by the capital’s taxi fleets. For example, in Yandex.Taxi, the Moskvich 3 crossover belongs to the Comfort category.
Moskvich, together with other brands officially represented on the Russian market, is trying to attract customers with special offers and promotions. Yes until the end of February to behave Discount of 200 thousand rubles on liftbacks “Moskvich 6” and gasoline “Moskvich 3” in the maximum configuration. For the other three versions of this crossover, a discount of 100 thousand rubles was announced.
Model range of the Moscow plant in the first half of 2024 planned will expand with the larger Moskvich 5 crossover, and the D-segment crossover Moskvich 8 is expected to appear in Russia in the second half of the year.
What to play against Moskvich?
Oleg Moseev, founder of Automarketer, says that in the Moskvich model range there is a serious lack of a mass-produced budget sedan with a budget of 1.5-1.7 million rubles, and factory-produced crossovers are not yet in high demand. project.
“There is no doubt that Moskvich will produce 35 thousand cars in 2024. On the one hand, it’s good that the manufacturer did not set too high plans. But they talk about production, but we also need to look at sales. According to their data, they sold 15 thousand cars a year. According to our data, 13 thousand cars were sold and registered,” Moseev told socialbites.ca.
At the beginning of Moskvich sales, a number of mistakes were made in marketing and relations with dealers, but later the situation improved. Moseev estimates that he is promoting the brand and most likely Moskvich will sell at least 30 thousand cars this year:
“There are some possibilities considering the price adjustment. Implementing body painting will also improve financial performance in terms of profitability. Moreover, the model range is also expanding. “If they sell more than 30 thousand cars this year, they should be out of profit next year.”
Independent automotive industry consultant Sergei Burgazliev believes that in its current form, the Moskvich range, consisting of two main models, looks weak and the strategy and marketing are not clearly communicated to all market players, including dealers, which slows down development and sales.
“Moskvich’s dependence on Chinese components is very high, but above all, Moskvich is very difficult to control. When two heavyweights like Moscow authorities and KamAZ try to manage an asset, the necessary decisions may not be taken quickly enough, the advisor told socialbites.ca.
He added that the Moskvich model range is now extremely limited and compared to its competitors, its products are not very attractive in terms of price, design or technology, but the desire to localize production should be evaluated positively. According to him, the current owners received Moskvich almost for free, so it is possible that the annual production volume of 40-50 thousand cars will be enough for operational payback.
“If Moskvich does not increase production, it will be extremely difficult to talk about long-term prospects. “Moskvich has something to work on,” Burgazliev said.