"Autovaz reveals intentions to transition to a four-day work schedule"
AvtoVAZ Shifts to Four-Day Workweek in Response to Market Challenges
Russian automaker AvtoVAZ has announced plans to switch to a four-day workweek for its factory operations starting September 29, 2025. This decision comes in response to a series of challenging market trends and economic factors affecting the company's business.
The primary influences on this decision are declining sales, high central bank interest rates, strong competition from imported cars, and excess car stocks. In the first half of 2025, new passenger car sales in Russia dropped by about 26.3% year-over-year, with AvtoVAZ’s own sales falling approximately 25% to around 155,000 units. The shrinking domestic market has put pressure on AvtoVAZ's sales and production planning.
Elevated key interest rates are making auto loans more expensive and harder to obtain due to stricter regulatory requirements for borrowers. This dampens consumer demand for new cars, directly impacting AvtoVAZ’s sales. Additionally, imported vehicles, particularly Chinese models, have significantly increased their market share in Russia. These competitors aggressively use price dumping strategies, flooding the market with cheaper vehicles and exerting pricing pressure on AvtoVAZ.
Imported car inventories in Russia are estimated at around 400,000 unsold units, further intensifying market saturation and competition. Given these factors, AvtoVAZ describes the move to a four-day workweek as a strategy to align production with the lowered demand and difficult economic environment.
AvtoVAZ intends to continue fulfilling social obligations fully according to current labor agreements while working on new model development and sales promotions to revive interest. The company recently announced a single corporate vacation period from late July to mid-August 2025, reflecting operational adjustments during this turbulent market phase.
The decision by AvtoVAZ will be influenced by market trends and economic factors, including the key interest rate and availability of credit products. If the key interest rate does not fall, the sales figure for 2025, according to an optimistic scenario, could be between 1.2 and 1.3 million units. However, Russian dealers expect a decrease in car sales in 2025, ranging from 12% to 25%.
In conclusion, AvtoVAZ’s decision-making for its autumn 2025 factory schedule is shaped by a shrinking domestic automotive market, tighter financing conditions for consumers, intensified competition from imports (notably Chinese cars with aggressive pricing), and the need to adjust production volumes accordingly. The planned shift to a reduced workweek starting late September is a response aiming to balance operational costs with these prevailing economic challenges.
[1] AvtoVAZ Press Release, "AvtoVAZ to Implement Four-Day Workweek," July 2025. [2] Reuters, "AvtoVAZ Switches to Four-Day Workweek Amid Market Challenges," July 2025. [3] Bloomberg, "AvtoVAZ's Four-Day Workweek: A Response to Market Conditions," July 2025. [4] TASS, "AvtoVAZ Announces Corporate Vacation Period," June 2025. [5] Sputnik, "Chinese Cars Flood Russian Market, Affecting AvtoVAZ," May 2025.
- The shrinking automotive industry, strained finance conditions in the market, increased competition from imported vehicles, particularly Chinese models, and excess car stocks in transportation have put intense pressure on AvtoVAZ, leading to their decision to shift to a four-day workweek.
- The new strategy by AvtoVAZ to align their production with the lowered demand and challenging economic environment in the automotive sector is a response to declining sales, rising key interest rates, consumers' reduced ability to obtain auto loans, and aggressive pricing strategies from imported cars, notably Chinese models.
- In the face of decreasing lifestyle demand for new cars due to a shrinking domestic automotive market, tougher credit conditions, and heightened competition from imported vehicles, AvtoVAZ has opted to adjust their factory operations starting September 29, 2025, by implementing a four-day workweek.
