Shortened workweek poses no threat, according to the Central Bank's assessment
The Russian automotive industry is making a temporary shift to a four-day work week, a strategic response to navigate a challenging economic landscape marked by decreased demand, high borrowing costs, and intense foreign competition.
Major players like AvtoVAZ, GAZ, KAMAZ, and Tsement holding are adjusting their production schedules to align with reduced demand. This move aims to minimize overproduction and inventory buildup, thereby reducing operational costs without resorting to large-scale layoffs.
KAMAZ has already partially implemented the four-day work week, and the Chelyabinsk Electrometallurgical Combine and Chelyabinsk Metallurgical Combine are set to follow suit from September 1 and October 1, respectively. The Yaraslavsky "Avtodiesel" and YAZDA plants have already transitioned to this schedule.
The Gorkovsky Automobile Plant and KAMAZ have led the way, having already implemented the four-day work week for specific periods. AvtoVAZ, however, is yet to confirm its decision, with the final call dependent on market trends and economic factors.
The decreased demand is partly due to a high central bank key interest rate, making car loans less affordable and reducing consumer purchasing power. This, coupled with the surge of Chinese vehicle imports, is displacing Russian brands and intensifying pressure on manufacturers.
The influx of Chinese brands, offering lower prices and products tailored to local customers, has contributed to the market share of Chinese brands exceeding 50%. This competitive pressure, combined with large unsold inventories—for example, over 30,000 trucks stockpiled at KAMAZ—is forcing price cuts and production cuts, supporting the move to reduced workweeks.
Despite the reduced working days, these companies emphasize maintaining full employee benefits and wages, aiming to preserve jobs during the economic slowdown and avoid sudden mass layoffs amid sector uncertainty.
In the first half of 2025, sales of new passenger cars and light commercial vehicles decreased by 25.7%, amounting to 575.5 thousand vehicles. However, according to AutoStat data, 1.57 million new passenger cars were sold in Russia in 2024, a record for the past five years.
Renat Tukteev, deputy general director for sales of new cars at Avilon, suggests an optimistic scenario for car sales in 2025 to be between 1.2 and 1.3 million units before the key rate drops. This temporary shift in workweek is, therefore, a calculated move by these companies to stabilize operations and protect their workforce amidst a challenging market environment.
[1] AvtoVAZ [2] GAZ [3] KAMAZ [4] Tsement [5] AutoStat
- Due to the challenging economic conditions in the Russian automotive industry, AvtoVAZ, like other major players, is considering adjusting their production schedules to maintain operational costs, possibly moving towards a four-day work week.
- The four-day work week is being implemented by companies such as KAMAZ, GAZ, and Tsement holding, with the aim of minimizing overproduction, reducing inventories, and preserving jobs amidst decreased demand and intense foreign competition, including the influx of Chinese brands.
