The State of Russian Automotive Industry in the 1993 .
After the dissolution of USSR its former Automotive industry which produced 2.1-2.3 million units per year of all types has found itself divided between former republics, bulk of it going to Russia, in fact overall production of 1.8 millions units was located in Russian SFSR, later Russian Federation. The main domestic manufacturers in the early 1990s were AvtoVAZ, AZLK, IzhAvto, GAZ and UAZ.
To understand Automotive industry of Russian federation in 1993 its important to understand conditions prevailing in USSR, prior to 1988, private buyers were also not allowed to buy commercial vehicles like minibuses, vans, trucks or buses for personal use. Domestic car production satisfied only 45% of the domestic demand; nevertheless, no import of cars was permitted. By the late 1980s,many of these companies, but most notably AvtoVAZ were suffering from the deterioration of its capital goods, such as tools and machinery, resulting from insufficient levels of investment over a long period. Unproductive and antiquated management techniques also contributed to the decline, as did the absence of market competition.
But following dissolution of USSR and establishment of Russian Federation Automotive industry was in for some major changes. Most Automotive companies were converted into joint-stock companies and were mostly consolidated under leadership of the Management , elected by shareholders of the new companies, in 1992 to respect his pre-election promise President Fyodorov pushed for establishment of independent Union of Unions to represent workers properly, this contributed to raise in the morale of the workers across all sectors, including in Automotive industry as many felt that previous Unions were to close to the Management.
In order to stimulate some competition into the Automotive market forgein brands were allowed but due to heavy protectionist policies most of these brands were still unavailable outside special economic zones to most of the Russian society ensuring that domestic car makers won't be pushed out of the market, though due to end of planned economy most of these makers were now in direct competition which each others. To further support its Automotive industry Russian Federation subsidized it with generous loans and various concessions in order to help Automotive industry to modernize and to maintain its competitive edge on Euroasian Custom Union market and aboard, one of the main challenges being maintaining competitiveness in European markets and especially Britain where exports of Lada peaked at 30.000 units in late 1980s. Russian government also remained one of the main buyers for domestic Automakers , buying Cars, Buses, limousines etc. in official function for state needs ensuring secure market for the industry.
In order to secure that products were up to newest standards quality controls were implemented as well as various safety regulations, lack of machinery and tools was overcome by government making an exception in its protectionist policies and allowing companies to aquire machinery and tools from forgein companies until domestic producers are up to standards.
Otherwise in order to remain competitive on forgein and domestic markets new, more modern designs were adopted.
For example AZLK , producer of Moskvitch brand
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launched design and experimental work to create a new model car (sedan M-2142) and an engine plant.
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While AvtoVAZ, producer of Lada
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Launched the Lada 110-series in 1993.
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With the demand for cars growing, especially with improving economic situation.
In 1993, overall output increased by 14.2% in comparison with Soviet Times and achieved production of 2,055,600 units, main target being Russian domestic market and EEU/CIS markets which will become one of the most important markets for Russian and by extension Ukrainian producers.