What is in this article?:
- GM-AvtoVAZ Breaks Ground for Plant Expansion; Prepares for All-New Chevy Niva
- Upcoming Niva Designed With Core Customers in Mind
For Jeffrey Glover, outgoing managing director, the expansion is one of the most important moments of his time at Togliatti. The project’s approval means funding for the next-gen Chevy Niva and the addition of press and body shops.
“We have a low-cost business model, and we proudly defend it,” Glover says.
Upcoming Niva Designed With Core Customers in Mind
The styling will be recognizable, “but it will be different, fresh,” he says. ‘You will see more Chevrolet in there,” but the car’s heritage will be apparent.
“I can tell you that it will be just as robust as the current Niva,” he says. We are designing it with the quality upfront, so you are actually going to find a car that has better durability. The styling is much more aligned with the Chevrolet family.”
The next-gen Niva will have a slightly longer wheelbase that will help with handling, and the auto maker is looking to make the luggage space a bit bigger.
“We are designing it thinking about our core customers, so we are thinking about low operating cost, and we want to have the same price positioning as we do today with the current Niva,” Glover says. “And that’s a challenge, because suppliers are hungry for more.”
However, moving to more modern technologies is saving money, he says. “The thinking from 20 years ago is different than today, so less steel, but you can have the same amount of durability and robustness.”
Prototypes will be built this summer, and pilot vehicles will come late next year. Plans are to unveil the new Niva at the Moscow auto show in August 2014. Volume production starts in second-half 2015.
“We need to make sure we validate the car,” Glover says. “It is an important project for us, and there is so much new material on the car that we need to be adhering to special validation procedures.
“We need to do two winters and two summers of testing because we want to replicate the actual customer’s use of the vehicle. We know our customers drive their cars very hard. We have to make sure that when the final product is launched there are no scary surprises in terms of quality. That would destroy our reputation.”
The original Lada 2123 also was shown as a pickup prototype, but the truck was never produced. Glover does not exclude the possibility of pickup or an additional body version. “But as I say to the team here, we have enough on our plate right now. We don’t need to complicate things just yet.”
James Bovenzi, president and managing director-GM Russia and CIS, said in an earlier interview that the engines for the new Chevy will be made in Russia. The current Niva is powered by a 1.7L gasoline mill sourced from.
“We are still planning on engine localization here,” Glover confirms. “It will be a different, European-designed engine. I am not going to talk about the source of the design, but it is a major Western OEM.”
The Niva presently is sold in Russia and other CIS countries. In its first production years, GM planned to sell it in other markets as well, but those plans were canceled. However, the new model might be exported to other regions.
“We are making a car that from regulatory standpoints will allow us the ability to enter some of those markets,” Glover says.
The difficulty with exporting from Russia is that it is a developing market with a commodity-based economy. Inflationary pressures are severe, which can have an impact on the exchange rate.
“If your business plan is based on exporting, you can get yourself in trouble,” Glover says. “Our trick, and this is our plan, is to keep the material costs under control to make the business case work for Russia and the CIS states.”
If the auto maker gets the material costs and other associated costs working with just that part of the business, it is possible to talk about exports to other regions.
“If I start to write export volumes into the business case now, I am essentially reducing the pressure on my own team to focus on material costs. I dilute the costs,” Glover says. “And I don’t want to do that, because Russia is a very cyclical economy and I want to be insulated against this cyclicality.”
According to earlier plans, confirmed byPresident Igor Komarov in interviews, GM-AvtoVAZ was going to produce the successor to the current Lada 4x4 small CUV in addition to the new Chevy Niva. But AvtoVAZ now has different plans.
“That part of the program was not approved,” Glover says. “It appears AvtoVAZ wants to go a different direction at this point. Currently, we are tooling up for only our vehicle. The new Lada 4x4 is a different project. We have the capacity, and we would love to support our shareholders.”