Yesterday’s annual general meeting of KamAZ shareholders was a demonstration of current tendencies of Russia’s automobile market. The brave press-release distributed by KamAZ is full of impressing numbers and figures, but it is clear the company is preparing to new battles and stiff competition
In his speech at the meeting, CEO Sergei Kogogin said had had a “groundbreaking” year, during which KamAZ managed to overcome the negative effect of the 1990ies crisis and reclaim leadership in Russian truck market. “KamAZ is an the verge of a new, innovative phase in its development”, Kogogin stressed.
Indeed, he can be proud of his management. After going through tough times, KamAZ has now been showing positive results for five years in terms of production volume, turnover, profit and export. In 2007, the plant’s early turnover was roughly $ 4.8 bn., 47.8 percent more than in 2006. The company’s capitalization broke a historical record with over $ 3.5 bn., and its net profit almost quadrupled – from 59.2 to nearly 233 mn. dollars.
On the other hand, KamAZ cannot expect a serene future. Its market share decreased last year from 33 to 30 percent, despite the fact that Russia’s overall heavy load vehicle market grew intensively and became Europe’s no. 1 in terms of sales. In 2008, the market is expected to grow by further 10.5 % (up to 141,000 pieces). It is unclear if KamAZ will be able to defend its leadership. The company plans to sell 62,200 vehicles this year, of which only a part will be sold in Russia, so domestic market share will remain at about 30 %.
Truck building plants in today’s Russia experience the same problems as all the country’s car makers. KamAZ has to compete with European and Asian producers, but also with the Russian GAZ and Belarussian MAZ (the latter may soon join a partnership with Ural, another Russian plant). That is why KamAZ management is thinking of innovation; assigning two thirds (sic!) of last year’s record net profit to the company’s investment programs.
According to Kogogin, the future of KamAZ and its 72,000 employees and their families, “and of Russian heavy weight vehicle industry in general depends on the investment decisions our company makes today”.
Denis Kvasov
Photo: RIA Novosti
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