Former GM purchasing executive Bo Andersson is tipped to become the first foreign president of Russian carmaker Avtovaz. Andersson has been nominated to succeed Igor Komarov, who resigned last week. Komarov has managed the company since 2009 and was credited with pulling the OEM back from the brink of collapse.
The Avtovaz board is expected to confirm the decision during a vote in early November. Oleg Lobanov, Avtovaz’s vice-president for finance, will serve as acting CEO until a replacement is found.
Avtovaz became majority-owned by the Renault Nissan alliance in December of last year, when the carmakers and the Russian Technologies State Corporation became shareholders and owners of the Lada brand. The alliance has said that it intends to take full control of the Russian OEM by mid-2014.
Swedish-born Andersson has served as chief executive of Gaz, the Russian bus and truck maker, for the past four years. Gaz has declined to comment at this time.
Prior to this appointment, Andersson was the global head of General Motors’ global purchasing, logistics and supply operations.
Andersson has been credited with a dramatic turnaround at Gaz since taking over in 2009, after the company lost 30 billion roubles in 2008 ($1 billion at the time). By 2010, the manufacturer earned 2.1 billion roubles, as Andersson slashed costs and improve productivity. After shutting down the company’s passenger car operations, Gaz acquired contracts to manufacturer vehicles for Daimler, General Motors and the Volkswagen Group.
Andersson also brought his strong focus on logistics and supply chain at the commercial vehicle manufacturer. Firstly, he repaid outstanding supplier debts, and later focused on improving supplier performance. Under Andersson, Gaz also revamped its order-to-delivery system, including a switch to order-based manufacturing. The company also invested in new infrastructure for container handling, and developed a milkrun system for local suppliers using an in-house fleet of trucks.
At this year’s Automotive Logistics Europe conference in March, Andersson spoke via videolink from Gaz’s Nizhniy Novgorod plant about the need for detailed and achievable growth plans. When he arrived at Gaz in 2009, Andersson instigated just such a plan and cited the goals of negative cash flow, a 10% profit margin and improved quality and sales.
Although Renault Nissan has been investing in modernising Avtovaz in recent years, including a shared production line at plants in Togliatti and Izhevsk, the carmaker is still likely to improve productivity, invest in modern equipment and possibly reduce its headcount. The carmaker reported losses in the first half of 2013, while Lada sales have declined by 14% in the first nine months of this year compared to 2012. Despite this, sales in Russia are forecast to increase over the coming years, and is expected to surpass Germany as Europe’s largest market later in the decade.
Last month, Renault Nissan established a joint purchasing organisation for parts procurement. However, according to managers at Alliance Logistics Europe, the joint logistics organization of Renault Nissan, management and purchasing for logistics between Renault, Nissan and Lada so far remains separate. Logistics for Lada are currently managed by an in-house company.
