Kamaz's CEO Kogogin attends a session of the St. Petersburg International Economic Forum
Thu, June 16, 2022,
(Reuters) - Kamaz, Russia's largest truckmaker, sees its exports stagnating at last year's levels or falling slightly as clients shy away from settling payments with the firm after it was hit by Western sanctions, its chief executive said on Thursday.
Under EU and UK sanctions as part of Western sanctions over Russia's military intervention in Ukraine, Kamaz has seen its foreign clients become hesitant or even reluctant to make payments to the firm.
The company, which mostly exports trucks to former Soviet countries, had planned to sell some 5,000 trucks abroad this year but has since lowered its target to between 4,000 and 5000, CEO Sergei Kogogin said.
"We have not lost our client base," Kogogin told reporters on the sidelines of the St. Petersburg International Economic Forum. "Payments are the main issue when it comes to exports. Our partners have difficulty understanding how they can pay us. And we also have difficulty understanding."
Kogogin said Kamaz's competitiveness as an exporter has also been hampered by a stronger rouble, which is beneficial to importers but hits the revenue of exporters given that they receive smaller rouble proceeds for selling their goods abroad for other currencies.
With the current exchange rate – at around 56.95 roubles per U.S. dollar and 59.17 roubles per euro – Kogogin said profit from Kamaz's exports this year would be "zero in the best case scenario".
On the domestic market, Kamaz expects to increase sales to 45,000 trucks from 36,400 last year as it fills the void left by the exit of European truck brands from Russia.
Kamaz's revenue is expected to fall in 2022, in part due to a drop in the production of its more expensive K4 and K5 models.
"It's painful for us because expensive trucks generate the bulk of the company's cash flow," Kogogin said.
(Reporting by Reuters; editing by David Evans)
Putin says government must support domestic car industry, wants new plan soon
Employees work at the assembly line of the LADA Izhevsk automobile plant in Izhevsk
Thu, June 16, 2022
LONDON (Reuters) - Russian President Vladimir Putin ordered his government on Thursday to quickly come up with new measures to support the domestic car industry, which has seen sales crater since the invasion of Ukraine.
Amid a crunch on demand from Russian buyers and severe logistics problems as a result of Western sanctions, car sales slumped a record 83.5% in May, according to Association of European Businesses (AEB) data.
"I would like to ask the government to tell us in detail what swift measures it is taking to support the auto industry and stabilise the internal market," Putin said in a meeting with officials broadcast on state TV.
Interfax news agency quoted him as saying the government should come up with an updated plan before Sept 1.
Industry and Trade Minister Denis Manturov said Moscow would allocate 20.7 billion roubles ($377 million) this year to support demand for cars, Interfax reported.
Some 10.2 billion roubles would be spent on resuming car loans with the rest split between support for preferential leasing rates as well as discounts for electric and gasoline-powered vehicles.
"This is what should be implemented in the near future in order to stimulate the market for precisely those products that are freely produced and can be supplied to our consumers," the agency cited him as saying.
Russian statistics agency Rosstat says car prices have jumped nearly 50% since the start of the year, slamming demand in a country where household incomes have declined while inflation hovers near 20-year highs.
In recent weeks a string of officials have warned about a possible demand slump that could accentuate the economic crisis, already expected to be the worst in at least two decades.
Despite a high-profile import substitution drive, Russia's auto industry had remained heavily reliant on foreign investment and equipment.
Lada-maker Avtovaz, Russia's largest car manufacturer, halted production for more than two months citing a shortage of electronic parts.
French auto giant Renault struck a deal in May to sell its majority stake in Avtovaz to a Russian science institute, reportedly for the symbolic sum of just one rouble, with a six-year option to buy it back.
($1 = 54.8750 roubles)
(Reporting by Guy Faulconbridge in London and David Ljunggren in Ottawa; Editing by Gareth Jones and Jonathan Oatis)
Employees work at the assembly line of the LADA Izhevsk automobile plant in Izhevsk
Thu, June 16, 2022
LONDON (Reuters) - Russian President Vladimir Putin ordered his government on Thursday to quickly come up with new measures to support the domestic car industry, which has seen sales crater since the invasion of Ukraine.
Amid a crunch on demand from Russian buyers and severe logistics problems as a result of Western sanctions, car sales slumped a record 83.5% in May, according to Association of European Businesses (AEB) data.
"I would like to ask the government to tell us in detail what swift measures it is taking to support the auto industry and stabilise the internal market," Putin said in a meeting with officials broadcast on state TV.
Interfax news agency quoted him as saying the government should come up with an updated plan before Sept 1.
Industry and Trade Minister Denis Manturov said Moscow would allocate 20.7 billion roubles ($377 million) this year to support demand for cars, Interfax reported.
Some 10.2 billion roubles would be spent on resuming car loans with the rest split between support for preferential leasing rates as well as discounts for electric and gasoline-powered vehicles.
"This is what should be implemented in the near future in order to stimulate the market for precisely those products that are freely produced and can be supplied to our consumers," the agency cited him as saying.
Russian statistics agency Rosstat says car prices have jumped nearly 50% since the start of the year, slamming demand in a country where household incomes have declined while inflation hovers near 20-year highs.
In recent weeks a string of officials have warned about a possible demand slump that could accentuate the economic crisis, already expected to be the worst in at least two decades.
Despite a high-profile import substitution drive, Russia's auto industry had remained heavily reliant on foreign investment and equipment.
Lada-maker Avtovaz, Russia's largest car manufacturer, halted production for more than two months citing a shortage of electronic parts.
French auto giant Renault struck a deal in May to sell its majority stake in Avtovaz to a Russian science institute, reportedly for the symbolic sum of just one rouble, with a six-year option to buy it back.
($1 = 54.8750 roubles)
(Reporting by Guy Faulconbridge in London and David Ljunggren in Ottawa; Editing by Gareth Jones and Jonathan Oatis)
No comments:
Post a Comment