Is it a smart decision?
First, a few legal and financial subtleties regarding the current state of affairs at the car plant in Ulyanovsk. The company has not been independent for a long time and is part of the Sollers Auto group, which, in addition to UAZ, works with foreign manufacturers - Mazda, Ford and Isuzu. The group also belongs to the ZMZ engine-building plant, which supplies engines for UAZ vehicles. Over the past three years, managers have been carrying out a large-scale restructuring of the enterprise, freeing it from non-core assets. Increased profitability, so to speak. This may indicate either preparations for the sale, or the search for a wealthy partner capable of organizing production at the facilities of UAZ. We are not talking about creating something of our own and new. Adil Shirinov, the head of Sollers and the general director of the Ulyanovsk Automobile Plant, evasively announced the prospects at a November press conference:
“The plant cannot create a new product. First, it means huge investments, expertise, and so on. What product to create? You need to keep up with the times. The new product will be created by those who can do it. UAZ has its own niche, its own segment of SUVs. This is what needs to be worked out today - before a more competent solution is found, which we are also looking for. But we will not create a new product there, this is a utopia! "A certain analogue of the Japanese Toyota Prado was considered as a new product at a price of 1 to 2 million rubles. We were thinking about a fundamentally new frame machine, however, later the concept was transformed into a deep modernization of the Patriot. Now, as we can see, even this option has been abandoned.
The mentioned "Patriot", "Hunter" and "Loaf" in various versions will remain on the conveyor. There are also stillborn "Gazelle killers" trucks "Profi". This is the 70st century, and even with the most optimistic scenario, the machines will not last even five years in production. And it's not even about the archaic design, which is already 30 years old, but about the plant's losses. Despite the good, in general, volumes of products - more than 40-2 thousand cars per year, the car plant showed a net loss of XNUMX billion rubles only last year. Probably, the current year will end with losses. Shirinov's pessimistic rhetoric points to just such a scenario. Lack of investment in new models is a sure way to self-destruction. Paradoxically, Shirinov himself does not speak directly about this, reassuring everyone with the first indexation of workers' wages in many years and the stable operation of the conveyor.
The automobile economy is so structured that when production volumes fall below 25 thousand cars per year, the profitability of production goes into negative territory. The market prospects for archaic UAZ vehicles are leading to a significant reduction in production in the coming years - the buyer will not forever vote with the ruble for a domestic manufacturer. Chinese manufacturers Geely and Haval breathe in the backs of Ulyanovsk residents, ready at any time to offer in no way inferior analogues. The bosses of UAZ are not ready to invest (borrow) 1-2 billion dollars on the development of their own novelty - neither the current level of demand of 30-40 thousand cars per year, the investment will never pay off.
The UAZ management also does not have to rely on the mythical joint production of a full cycle. Now in the world there is a pandemic and few people will decide on serious projects. What if tomorrow another lockdown is announced and the markets collapse? We can only hope for a small-scale and large-scale assembly of SUVs of some Japanese or, at worst, Chinese brand. This will entail a noticeable reduction in staff and production space - for a "screwdriver" you don't need much intelligence. Not to mention the loss of the engineering headquarters. According to gazeta.ru, key designers and managers left the Sollers group at the beginning of 2021.
Heap of consequences
The shutdown of the UAZ main conveyor is not just another closure of unprofitable production. This will be followed by a number of negative developments. Firstly, the Zavolzhsky Motor Plant will have a hard time, the products of which were mainly sent to the UAZ conveyor. Orders from the Gorky Automobile and Pavlovsk Bus Plants will not be able to cover the losses of the engine builders. By the way, the project for the development of a modern engine together with the Germans from FEV Engineering at ZMZ has already been phased out - this is a very bad sign. At the moment in Russia there is no competence for the independent creation of modern automobile engines and foreign help was vital here. Following the "big brothers", small contractors and numerous fraternities of servicemen and dealers will go bankrupt.
Secondly, the closure of UAZ will lead to a crisis in state orders. Defense, including numbers. In total, in different years, up to one third of the production went to the needs of the special services and the army from Ulyanovsk. He does not forget about civilian state structures, which are obliged to purchase domestic equipment, for example, Russian Railways. Even partial localization on UAZ of models from third-party manufacturers, for example, Isuzu or Haval, will not save the situation. The military will still not be able to buy cars with imported components, whatever their share. Ulyanovsk residents also cannot leave on the assembly line exclusively military orders - the production volumes are too small. And the main customer will not allow the main customer to inflate prices many times over.
There are no adequate analogues of light army off-road vehicles UAZ in Russia at all. If simple and unpretentious "Loafs" can somehow replace the Nizhny Novgorod "Sobols", then there is a big problem with bonneted cars. Decades of monopoly of Ulyanovsk SUVs in the Russian army have led to the fact that there are simply no competitors. Of course, the words of Shirinov for someone from the auto industry will become a motive for action - the market for budget jeeps cannot be empty. But creating light SUVs of the UAZ standard size for the army from scratch will be a very difficult task, which will take years to complete.
The current result is a completely natural result of the long-term policy of the UAZ management. We can say that government orders have poisoned the enterprise. On the one hand, they provided a fairly stable income that allowed them to rest on their laurels. On the other hand, the profit from the sale to the state did not allow to invest enough in promising developments. Or there was simply no desire. The management, obviously, counted on the prompt purchase of technologies from abroad. Then sanctions struck, the ruble fell, and all hopes for modernization through imports collapsed. And now, few foreign investors agree to cooperate with the Ulyanovsk plant. It's all about the Western sanctions, which may come at any moment - after all, the UAZ is seriously tied to the state defense order. KAMAZ generally had to withdraw the entire military line into a separate brand "Remdizel" so as not to provoke Western "colleagues".
In the end, the state will have to respond promptly - either to allocate multibillion-dollar grants to Ulyanovsk residents for a new model (which is very unlikely), or to look for a developer of an analogue of the UAZ among the remaining automobile plants. Already in 5-6 years, a considerable share of UAZs in the army will reach their service life and they will have to be changed for something. The development of a new model may well be undertaken at KAMAZ or GAZ. Maybe NAMI, who has become skilled with Aurus, will help more intelligently. You just need time and more money. For financial efficiency, it is necessary, simultaneously with the army vehicle, to work on the civilian version on the same aggregate base. This is the only way to maintain the required rate of 25 thousand cars per year. In the "peaceful" version of the "UAZ" of the XXI century, it is already possible to put up with imported units, after all, the jeep is not intended for the front. In any other case, the cost of replacing the UAZ will be simply prohibitive. Of course, there is also a third scenario for the development of events - the state does not react at all to the death of a strategic supplier for the army. And this is fraught with serious consequences - look how much military equipment is tied to jeeps and pickups from Ulyanovsk.
For ordinary people, the slow dying of the legendary Ulyanovsk automobile plant will be another milestone in parting with the Soviet legacy. And this is perhaps one of the saddest symbols of the future.