Uncertain Start for Lada X-Cross 5 at AvtoVAZ
In June this year, a ceremony took place at the former Nissan plant in Saint Petersburg to mark the official start of production for the Lada X-Cross 5 crossovers. Yet the model never reached the market. The X-Cross 5 name hides a FAW Bestune T77, with its original logo replaced by the Lada badge, signaling a complex branding move under sanctions conditions. (Source: socialbites.ca)
Experts consulted by socialbites.ca question the viability of the project. They argue that assembling finished Chinese vehicles at AvtoVAZ would be more difficult than simply importing individual components, given sanctions lists from the European Union and the United States. (Source: socialbites.ca)
Sergei Tsyganov, who runs the Telegram channel “Russian Automobile,” notes that AvtoVAZ began talks with Chinese companies about loading new production sites, only to face sanctions a few months later. This turn undoubtedly affected relations with Chinese partners. (Source: socialbites.ca)
For AvtoVAZ, the FAW setback hits both image and economics, especially since a batch of Lada X-Cross 5 cars has already been built. Questions arise about how to proceed with these vehicles, which brands to use, and how to maintain a relationship with FAW while avoiding heavy losses. (Source: socialbites.ca)
From a broader perspective, Chinese automakers fall into two camps regarding Russia: those that ignore sanctions and those that previously allowed cooperation but tightened their stance. Experts say the number of partners willing to defy sanctions is very small. (Source: socialbites.ca)
Experts estimate the Lada X-Cross 5 has less than a 50% chance of entering the Russian market. Meanwhile FAW continues to invest heavily in promoting the Bestune T77. If AvtoVAZ were to bring the car under the Lada brand, it would likely expect FAW to refrain from selling it abroad under its own name in Russia. (Source: socialbites.ca)
Independent automotive consultant Sergei Burgazliev points out that large Chinese automakers tied to Western markets fear sanctions pressure most. FAW, one of the continent’s biggest brands, operates across Southeast Asia where US policy is influential. He adds that risking broad sales in that region is unlikely because of the Russian market. (Source: socialbites.ca)
They Sell Themselves
The FAW Bestune T77 remains popular in Russia even without the Lada emblem. FAW Russia reported the Bestune T77 as a best seller for the first three quarters of 2023, with 2,784 units sold in the nine months of this year, accounting for about 40% of all FAW passenger-vehicle sales in Russia. The T77 is offered in the Russian market at 2.3 to 2.6 million rubles, while the simpler Lada Vesta Cross in top trim exceeds 1.8 million rubles. (Source: socialbites.ca)
Warranty Remains a Question
Sergei Burgazliev notes that the sale of assembled Lada X-Cross 5 cars will likely occur, but questions remain about who will purchase them without warranty and service coverage. Dealers typically require 3–4 months to learn to service a new model, and translating technical documentation into Russian can reach about 2,000 pages. (Source: socialbites.ca)
Maxim Kadakov, editor-in-chief of Za Rulem, expresses cautious optimism. He believes the vehicles produced at AvtoVAZ facilities would carry the Lada brand, with guaranteed service and spare parts. Kadakov also notes that since summer, FAW has faced challenges cataloging spare parts for the Bestune T77, which could mean Lada service centers might become an option for FAW owners. (Source: socialbites.ca)
Which Chinese Partner Will AvtoVAZ Work With?
Negotiations about cooperation with AvtoVAZ involve the Dongfeng motor group, according to a report from a No Limits Telegram channel. Linlong Zou, Dongfeng’s general management director, says the company is exploring localizing components in Russia and expects some assembly to begin in 2024. At the MIMS exhibition, Dongfeng showcased engines, transmissions, including a six-speed robotic unit and a hybrid power system based on a 1.5-liter engine. (Source: socialbites.ca)
The simplest path for AvtoVAZ and its Chinese partners appears to be collaboration on individual components and assemblies. For instance, Lada Vesta has already received a Chinese-supplied synchronizer for a 1.6 engine with 106 hp, and a Chinese gas-distribution mechanism has been installed. Kadakov notes that AvtoVAZ vehicles will receive CVTs and manual transmissions from WanLiYang in 2024. (Source: socialbites.ca)
According to Sergei Tsyganov, AvtoVAZ’s cooperation with Dongfeng has progressed further than with FAW, with plans to populate the Izhevsk production site with Dongfeng vehicles. He adds that Dongfeng is one of three manufacturers that have managed to bypass sanctions, with Motorinvest assembling cars in Lipetsk as a counterparty. An on-site meeting at the AvtoVAZ plant in Izhevsk was approaching. (Source: socialbites.ca)
The official AvtoVAZ spokesperson declined to comment on partner interactions. (Source: socialbites.ca)