Lada Re-Building of a brand in tough times

Lada
Re-Building of a brand
in tough times
Bo Andersson
President & CEO JSC AVTOVAZ
September 2014
13 November 2014
1
Agenda
• The Russian Auto Market
• AVTOVAZ Challenges & Opportunities
• What have we done this year?
• What will we do next?
2
The Russian Automotive Market
• This year the market is down by 12.6 %
• It is still the 7th largest market (2.3 M-units)
• Low Cost Segment is down by 30 %
• Luxury Segment is up 9.3 %
3
The Russian Automotive Market
FIVE of TOP 10 cars are LADA branded
Granta
16,924
1
Solaris
10,001
Logan +
Sandero
8,503
Rio
Kalina
6,384
2
5,652
Duster
4x4
3
Largus
4
Polo
Priora
5,705
5,387
4,822
4,053
5
3,556
4
AVTOVAZ: Who we are
Leading
Manufacturer
of vehicles in Russia
544,000
cars
Own Brand
Name
Market Share
in Russia
Dealer Network
in Russia
Controlling
Shareholder
Headquarters
19%
Moscow
United
Automobile
Group, LLC
387
dealers
Alliance Rostec Auto B.V., a part
of Alliance Renault-Nissan
Togliatti, Russia
5
LADA Vehicles in Production
Granta
Largus
Kalina
4x4
Priora
6
Our Future
Introducing the New Generation of LADAs
LADA Vesta
LADA X-RAY
7
LADA Vesta
The most spacious
vehicle in its class
Best-in-Class
Features
Attractive Price /
Performance Ratio
Unique, new design
Best-in-Class
Drivability
8
LADA XRAY
Best-in-Class space for the
passenger's comfort
Unique seating
configuration
European
Safety
Standards
Most suitable for city
driving within its segment
Specifically designed for the
Russian driving conditions
9
Vesta and XRAY outside of Russia
New JV in Kazakhstan with full support from
the Presidents of Russia and Kazakhstan
10
Our Targets
1• 20 % Market Share in 2016
2• Positive Free Cash Flow
3• Minimum 6 % Operating Margin
11
Main Challenges
1• Increase Customer Focus
2• Improve Quality
3• Launch New Products
12
Full Focus on Customer Needs
New Customer Satisfaction Organization launched in 2014
1• Immediate reaction on customer’s problems
2• Cars repaired at dealers within 24 hours
3• Corrective actions implemented within 24 hours
13
Manufacturing Quality
1•
Defects to End Customers down
by 50 %
2•
First Time OK increased on all
Vehicles
─ Kalina Line:
─ B0 Line:
3•
50 %  80 %
37 %  75 %
8 out of 14 Priority Engineering
Defects Solved and Implemented
14
Launch New Products
Kalina Cross – September 2014
4x4 Urban – November 2014
Largus Cross – December 2014
15
Improved Key Metrics
Vehicles
Assembly Worker
White Collar Workers
Blue Collar Workers
Cash Equivalents
(M-EUR)
2013
2014
20
40
1/3
1/4
60
136
16
What will we do?
1• Increase our Customer Focus and
Develop our Dealers
2• Become TOP 3 in Quality in our Segment
3• Launch 5 new vehicles in 3 years
17