GM-AVTOVAZ Celebrates 10 Years of Growth
OREANDA-NEWS. October 03, 2012. The first Chevrolet NIVA vehicle rolled off the ASSEMBLY line of the JV. NIVA was recognized by Russian drivers as a comfortable, safe and reliable Russian SUV. And it was the first modern, good-quality, competitive and affordable product available on the Russian market. Since SOP, more than 1,600 changes have been made in the initial design of the model and, over the years, NIVA has truly become a people’s car with nearly a half of a million Chevrolet NIVA vehicles having found owners across Russia and CIS countries, reported the press-centre of GM-AVTOVAZ.
According to “Izvestiya” news magazine, “the fact that a world leading automotive manufacturer like GM comes to 'Russia's Detroit', [Togliatti], means more than just additional tax revenues for the city's budget or new employment. A successful new project represents a totally new development for the local community and the overall automotive industry [in Russia]. In fact, General Motors will perform towards AVTOVAZ in the same role that FIAT did more than three decades ago. The only difference is that the Italians built the operation, shared technologies and left, while the Americans have every intention of staying here. As GM Chairman Jack Smith said, they want to open huge potential of the Russian developing market by using local resources, experience and knowledge of Russian specialists.”
In September 2004, the JV launched production of a new front-driven C-class sedan Chevrolet VIVA based on Opel's Astra T-3000 platform, which was acknowledged as one of the best European models of that time. Just one year later, a new trim, Chevrolet VIVA Adrenline, was presented at the International Motor Show “Interavto”.
In January 2006, the JV started limited production of Chevrolet NIVA GLX with the Opel FAM1 engine of 1.8 l, new transmission, ABS, air conditioning and air bags. Based on EuroNCAP, Chevrolet NIVA had 4 safety stars. That version was in high demand by customers, and used GLXs continue to sell at a premium even today! Different NIVA modifications like Trophy and Hit have not escaped attention either.
At the end of February 2009, the last of the original designed NIVAs rolled off the GM-AVTOVAZ conveyor. This first version had been built since September 2002 and, between 2004-2008, was the best-selling SUV on the Russian market -- it was even acknowledged as “SUV of the Year - 2006” in Russia. Ten days later, a new, completely re-designed version was launched by the JV. The legendary model, which retained its excellent off-road characteristics, was restyled inside and out by the famous Italian design house Stile Bertone. To improve the quality of the product engineers introduced into the vehicles over 60 further engineering improvements.
Engineering improvements have continued since then -- all with an eye to improving the customer experience and end-product quality. In May 2010, the JV started introduced a number of engineering changes designed to reduce the overall noise level, improve driving comfort, as well as ride and handling. Since August 2011, ABS and front airbags have again become part of the program, becoming standard equpiment on uplevel models. ICV (in-country validation) and durability tests conducted by JV staff in Russia, Sweden, Germany and Spain.
According to media, “Chevrolet NIVA is definitely the most successful project for upgrade of the local product up to the appropriate world-level quality standards. GM-AVTOVAZ really succeeded in everything. Not least because of people, engineers and managers who really care about what they do.”
And developments continue. In August, the joint venture launched a limited edition version of NIVA with special off-road equipment for customers who really take advantage of the vehicle's tremendous off-road abilities. The Limited Edition has full underbody skid-plate protection, more ground clearance, a snorkel and special wheels (in addition to some other styling cues).
Since launch, demand has outstripped supply, and the JV continues to try to keep up by increasing production volumes. Through August this year, the joint venture has assembled 40,784 vehicles, 22% higher than during the corresponding period one year previous. Wholesales to dealers increased by roughly the same amount vs. one year ago, reaching 40,755 vehicles. Since launch, between 5-10 percent of cars have been exports to CIS markets. In total, since 2002 446,952 vehicles have been sold to customers. The dealership network is growing rapidly, too: today 153 dealers provide Chevrolet NIVA sales in Russian Federation plus 8 dealers and 3 distributors in CIS.
In terms of further developments, the Company plans to extend its production capacity to 120,000 units per annum -- more than 20% higher than today -- as part of General Motors' investment program in Russia, and to develop a completely new Chevrolet NIVA. Styling of the new generation vehicle is already completed and engineering work is well underway.
Today's NIVA is a high-quality vehicle. Over the last two years, the number of warranty defects reported by customers has declined by over 70% thanks to a host of engineering changes, solid work with components suppliers, and a focus on process, training and standardized work principles. Against this backdrop, GM-AVTOVAZ was recognized as one of the best automotive operations in GMIO for compliance with GM-GMS, General Motors' Global Manufacturing System (96.9% compliance). GMIO also certified the joint venture for the Build-in-Quality Level 3 based on the GM global 5-level quality development strategy. Both of these 'culture' awards are high-praise for an organization that began from scratch in a very difficult operating environment.
In 2012, the joint venture was recognized by the U.S. Environmental Protection Agency as an 'Energy Star' in the category “manufacturing operations” for its contribution in the world energy conservation. Over the last two years, energy consumption at the joint venture has fallen by 27.2% -- this despite the fact that production has increased substantially during the same period. Safety is also an overriding concern, and the enterprise has been repeatedly awarded for being the safest industrial enterprise in Togliatti and the Samara region, as well as by General Motors twice for achieving 5 million straight working hours without an accident. That demonstrates not only commitment to the JV's workers, but represents a competitive advantage when recruiting new employees in tight labor markets.
It is impossible to avoid mentioning the many test-drives organized for journalists, charity activities to support children in the region, the employee’s participation in community, sports and suggestion programs. So many activities have been organized with and around the JV and Chevrolet NIVA! Participation in Car Parades, the “Zhiguli Cruise” and rallies in Samarskay Luka, climbing to Goverla and the Carpathian mountains, rallies on- and off-road in the remote North of Russia, in Kazakhstan, around Lake Baikal, through the Middle East, Africa, Mongolia and even China.
The JV itself is just as special as the car it builds. Over the last ten years, a well-run, efficient, cost-conscious, process-oriented and focused organization has developed that meets global quality and efficiency benchmarks, provides stable incomes to its employees and tax revenue for the community, and represents a profit-generating asset for its shareholders. As GM-AVTOVAZ Managing Director Jeffrey Glover states, “I cannot think of any other vehicle operations globally that have been consistently profitable each and every year they have been in operation -- including during years of difficult economic crisis. In that respect, this JV is very unique and special.”
“Our business model and business processes are low-cost, efficient and directed not towards winning short-term races, but final results,” as Finance Director Sergey Dombrovsky emphasizes. “Our major motivator is that we see our results, and feel responsible for them. We don’t have a right for mistakes, and we cannot afford them in light of our size. We are a small, independent company that has to rely on its own resources -- both in terms of people and costs. This creates a family-company mentality that keeps the team focused and close-knit – both former and today’s employees and our partners say this.”
Since GM-AVTOVAZ was established, tough standards and targets have been set for this comparatively small company. The JV has achieved these targets, and has built a reputation across Russia and the CIS as a manufacturer and retailer of high-quality, competitive and affordable vehicles, in its community for being a workplace of choice, and throughout General Motors for delivering results that need no explanation.