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AvtoVAZ plots Latin American production
Ward's Automotive International / December 15, 1995

By Larry Luxner

Russian automaker Lada, in an unprecedented move, will soon begin assembling its sturdy little cars in Uruguay and Colombia -- mainly for export to Mercosur and Andean Pact nations.

Rafael Patrick Anssens, sales manager for Motores Internacionales S.A. in Panama, which has exclusive Lada distribution rights for 24 Latin American and Caribbean countries, said the company would begin next month by manufacturing 300 units a month in Cali, Colombia, through a joint venture he declined to elaborate on. Lada will produce a similar number of vehicles in Uruguay in partnership with local auto distributor Efecto S.A., possibly at an idle auto-assembly plant in the Nueva Palmira free zone previously used by Volkswagen.

"We want to be very prudent," Anssens said Nov. 29 in a phone interview from Panama. "We don't want to invest too quickly and have financing problems later. We will begin very slowly, only with some models we know will be accepted."

One such model is the three-door Samara 1300, which like all other Ladas is currently assembled at an auto plant in Togleatti, Russia. Worldwide, Lada produces 700,000 vehicles a year. Most of those are destined for Eastern Europe, China, Turkey and the Far East, though about 50,000 Lada cars end up in Latin America. At an average $8,000 a car, that comes to annual sales of $400 million.

"Our biggest market is Chile, where we are selling about 8,000 to 12,000 units a year," said Anssens. "In Argentina, the cars cost $10,000, while Colombia, the price is only $7,000 because taxes there aren't so high, but the average price is about $8,000."

Ladas are a well-known fixture throughout communist Cuba, where until the collapse of the Soviet Union the boxy vehicles were one of the most tangible symbols of Soviet-Cuban friendship. Since 1990, Motores Internacionales has assumed responsibility for selling Ladas in Cuba. Today, apart from a few vintage 1950s American automobiles on the road, Lada dominates the island's streets and highways. Other Caribbean markets for the Russian-made car include Jamaica, Guyana and the Dominican Republic.

According to Anssens, the Cali factory will supply not only Colombia with Ladas, but also the four other members of the Andean Pact: Venezuela, Peru, Ecuador and Bolivia. Likewise, the Uruguay plant will supply fellow Mercosur nations Argentina, Brazil and Paraguay. He declined to specify dollar investment figures or sales projections.

Asked why Lada -- after years of relative obscurity -- is suddenly taking the Latin plunge, Anssens replied: "Everybody else in this area is doing the same."

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