Avtovaz has suspended Lada assembly at Asia Auto plant in Kazakhstan

Avtovaz has suspended Lada assembly at Asia Auto plant in Kazakhstan


 

Kommersant.- Massive redundancies have been announced at Asia Auto plant in Ust-Kamenogorsk, Kazakhstan, where Russian Avtovaz Lada vehicles were being assembled. As promised by the head of administration of the East Kazakhstan region Danial Akhmetov, all employees will be provided with new jobs following the closure of the enterprise.

The suspension came as a result of the dissolution of the Industrial Assembly Agreement signed with Asia Auto, in accordance with which the enterprise was provided with benefits, as well as the return of utilisation fees. The conveyor has been inactive since the termination of the agreement in November, according to Kommersant. Asia Auto lost the court of first instance on the reimbursement of the benefits received on the 3rd of February, which entitled the Ministry of Industry and Commerce to request the return of 173.9 billion tenge (30.8 billion rubles) from the enterprise to the state. As stated by the ministry, all companies except for Asia Auto have kept their words and fulfilled their obligations before the government in full and within deadlines, putting welding and painting equipment in operation.

Avtovaz has commented that the company is closely monitoring the situation and has already started exploring alternative options to maintain the presence of Lada and continue to provide service to clients without interruptions in Kazakhstan. The Russian manufacturer has emphasised the position of Kazakhstan as one of the key export markets for the brand, underlining the intention to develop the relations even further.

17,500 Lada vehicles were exported to Kazakhstan in 2020 (19.6% market share, including component supplies). According to the Association of Kazakhstan Automotive Business data, the production of the brand in the country has risen by 8%, to 15,900 units.