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Two years of Mora: AvtoVAZ has a new president

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<p>Since June 1, 2018, the domestic “AvtoVAZ” once again changed its president. Instead of the Frenchman Nicolas Mora, his compatriot, Yves Karakatzanis, became the president of the enterprise. Care Mora, who worked as head of the auto giant for more than two years (he took office on April 4, 2016), <strong>in contrast to its predecessor, the Swede</ strong> Bu Andersson, did not get a scandalous coloring and is associated with Mora’s rise. In the winter of 2018, he was appointed senior vice president of Groupe Renault and head of the Eurasia region. Prior to the presidential elections, Mohr successfully combined these two posts, but it was clear to everyone that the schedule of work turned out to be too tense and for a long time so will not continue. On February 2, the general director of Rostek, Sergei Chemezov, said that the state corporation, together with the French automotive concern Renault <strong>discusses the change of the president of Avtovaz</ strong>, and already on April 16 it became known about the future appointment of Karakatzanis. Nevertheless, Mohr will continue to work closely with PJSC AvtoVAZ as Deputy Chairman of the Board of Directors of the Company.</ p>

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<p>The last two years Karakatzanis was led by Renault Romania and until April 30 served as president and CEO of Automobile Dacia SA. He was born in 1964 in Marseilles (France). He received an engineering degree from Ecole Centrale de Paris and began his career with Bossard Consultants and Hewlett Packard. In 2013, he became senior vice president of production and logistics in the Eurasia Groupe Renault region. Since April 2016, Karakatzanis worked as the CEO of Groupe Renault Romania and the President-CEO of Automobile Dacia SA.</ p>

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</ style><h4>Mor at the helm</ h4>

<p>Prior to joining AvtoVAZ, Nicolas Moore was Renault’s CEO in Romania, where he managed all of the company’s commercial and production activities. At the same time, he served as president and general manager of the joint-stock company Automobile Dacia SA, one of the fastest growing automotive brands in Europe and Romania’s largest private company.</ p>

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<figure><img src ="https://img.gazeta.ru/files3/867/10301867/SIZ_9918-pic905-895×505-5169.jpg" alt ="The head of AvtoVAZ, Nicolas More, at the Lada XRay Cross Concept car"> Artem Sizov / “Gazeta.Ru”</ figure><figcaption>The head of AvtoVAZ, Nicolas More, at the Lada XRay Cross Concept car</ figcaption></ div>

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<p>Mohr made a positive impression on AvtoVAZ employees. “Mor is very calm, thoughtful, he did not give loud promises at once,” the source at AvtoVAZ, who was present at the first meeting with Mor, told Gazeta.ru. “If Andersson pored a lot, this man made an impression on us as a simple worker.” In an interview with Gazeta.ru, Mor told me that <strong>”I would very much like to return Russians faith and pride for the company, the brand Lada and Togliatti itself”</ strong>.</ p>

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<p><span class ="idea">Mor also talked about plans to launch eight new models and eight new facelifts of models until 2025.</ span></ p>

<p>After the sedan Lada Vesta, which was released back in “Andersson’s time”, a high front-wheel crossover Lada XRay, Lada Vesta SW and SW Cross versatile passengers appeared on the market with Mora’s arrival, as well as the Lada Vesta Cross high-end sedan.</ p>

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<figure><img src ="https://img.gazeta.ru/files3/677/10740677/upload-2_IMG_8197-pic905-895×505-61778.jpg" alt ="Chief designer of AvtoVAZ Steve Mattin with the universal LADA Vesta SW Cross" data-fullimg="//img.gazeta.ru/files3/677/10740677/upload-2_IMG_8197-pic4_zoom-1500×1500-16866.jpg" data-description ="Chief designer of AvtoVAZ Steve Mattin with the universal LADA Vesta SW Cross"> AvtoVAZ</ figure><figcaption>Chief designer of AvtoVAZ Steve Mattin with the universal LADA Vesta SW Cross</ figcaption></ div>

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<p>In addition, it was a historic decision to stop the production of models Lada Priora and Kalina.</ p>

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<figure><img src ="https://img.gazeta.ru/files3/229/10156229/upload-SIZ_9638-pic905-895×505-13186.jpg" alt ="Lada XCode Concept"> Artem Sizov / “Gazeta.Ru”</ figure><figcaption>Lada XCode Concept</ figcaption></ div>

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<p>New models of “AvtoVAZ” intend to show at the Moscow International Auto Show in the autumn of 2018.</ p>

<h4>Losses in inheritance</ h4>

<p>At the time of Mora’s arrival it became known that in 2015 AvtoVAZ incurred 73.85 billion rubles in losses. This, in particular, led to the actions of Bu Andersson, who too often applied for parts to foreign manufacturers instead of local suppliers and went on a very simple path.</ p>

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<figure><img src ="https://img.gazeta.ru/files3/639/8108639/upload-RIAN_02483125.HR.ru-pic905-895×505-25923.jpg" alt ="The President of JSC AvtoVAZ Bu Andersson at the Moscow International Automobile Salon …" data-fullimg="//img.gazeta.ru/files3/639/8108639/upload-RIAN_02483125.HR.ru-pic4_zoom-1500×1500-29365.jpg" data-description ="The President of JSC AvtoVAZ Bu Andersson at the Moscow International Motor Show in 2014 in the Crocus Expo"> Grigory Sysoev / RIA Novosti</ figure><figcaption>The President of JSC AvtoVAZ Bu Andersson at the Moscow International Motor Show in 2014 in the Crocus Expo</ figcaption></ div>

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<p>In 2016, the net loss of AvtoVAZ under IFRS was 44.8 billion rubles. And according to the results of activity in 2017, the net loss of AvtoVAZ under IFRS was 9.7 billion rubles. In the company, this was associated with the restructuring costs amounting to 2.2 billion rubles, the costs of maintaining a still high debt burden (7.3 billion rubles – the company’s total debts amount to 70 billion rubles), as well as a one-time write-off in one from joint ventures. At the same time, by the end of 2017, the AvtoVAZ Group increased its consolidated revenues to 225.6 billion rubles. (+ 22% by 2016). Cash flows from operating activities amounted to 8.7 billion rubles in 2017, and free cash flow reached 3.9 billion rubles, operating margin was 1.6 billion rubles.</ p>

<p><span class ="idea">As for questions about break-even, in 2016, Moh stated that his goal was to make AvtoVAZ profitable already in 2018, but in February he corrected the plans, saying that “the company has a goal to break even in 2020 year “.</ span></ p>

<h4>Experts: losses have remained</ h4>

<p>Analyst “Alor Broker” Alexei Antonov in an interview with “Gazeta.Ru” said that the Moru could not overcome the negative trend of getting “AvtoVAZ” losses.</ p>

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</ style><p>”Press releases that speak of” operating profit “can only mislead people who have never read financial statements,” said Antonov.</ p>

<p><span class ="idea">- Loss instead of net profit in 2016 and 2017 speaks better than any news about the update of the model line: the company inefficiently spends money, earns less than it spends, even taking into account staff reductions, taking into account the reduction of non-production expenses.</ span></ p>

<p>Sam Mor’s return to profit predicted very carefully and <strong>spoke hesitantly about the year 2020</ strong>. But AvtoVAZ is a commercial enterprise, not a charitable one, and like any commercial enterprise, it should set a profit for the purpose of its work. “</ p>

<p>The expert also drew attention to the fact that AvtoVAZ has one of the lowest capacity utilization rates among Russian auto enterprises – only about 40%.</ p>

<p>”The change of the top manager in such a short time can not mean that the results of his work are evaluated positively: rather, this indicates that the shareholders are looking for a certain leader with a” secret ingredient “who will be able to reorganize the long-established system of relations in the team of company managers and directly on the assembly line, and shareholders will be sorting out candidates endlessly, “Antonov said. – Because the “secret ingredient” is in the tradition of production and collection of cars, in the productivity of labor on the line and controlling it, and not in the manager. The new leader needs to load the remaining 60% of the capacity with new models and does not generate a new loss. The task is almost impracticable. “</ p>

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<p>In turn, managing partner of the Expert Group “Veta” Ilya Zharskiy called Mora a typical crisis manager.</ p>

<p>”You can say a lot about the fact that AvtoVAZ experienced the peak of the sales crisis not so much thanks to the skillful management of the Mora team, but only with the active support of the state,” Zharskiy said. – But exactly</ p>

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<p><span class ="idea">at the Sea Avtovaz began to crowd its competitors and returned for the first time in six years a 20.5% stake, it was with him that export began to grow actively (in 2017 it grew by 31%).</ span></ p>

<p>At the same time, AvtoVAZ made a bet on the most expensive Vesta models in its lineup, hitting the top ten, as both Huyndai and Kia with the next update increased the quality characteristics of Solaris and Rio, with which neither Kalina nor Granta, much less morally and technically outdated Priora simply could not compete in comfort and quality. The bet on XRay and the segment SUV also proved to be true. “</ p>

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<figure><img src ="https://img.gazeta.ru/files3/655/7912655/TASS_12950094-pic905-895×505-52619.jpg" alt ="President of JSC AVTOVAZ Bu Andersson and Russian President Vladimir Putin (left to right) at the …" data-fullimg="//img.gazeta.ru/files3/655/7912655/TASS_12950094-pic4_zoom-1500×1500-56836.jpg" data-description ="President of JSC AVTOVAZ Bu Andersson and President Vladimir Putin of Russia (from left to right) at the Lada Vesta car before the plenary session of the 12th meeting of the Valdai International Discussion Club"> TASS</ figure><figcaption>President of JSC AVTOVAZ Bu Andersson and President Vladimir Putin of Russia (from left to right) at the Lada Vesta car before the plenary session of the 12th meeting of the Valdai International Discussion Club</ figcaption></ div>

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<p>The expert agrees with the view that while talking about overcoming financial problems, “AvtoVAZ is premature, but believes that the worst is over.</ p>

<p>”In general, the” black line “AvtoVAZ has been successfully overcome, which can not be said about the Russian market as a whole. The crisis manager is no longer needed, but a team is needed that can strengthen the hard-won gains achieved, and also continue integrating AvtoVAZ into Renault, “Zharskiy said.</ p>

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