Company

History

CJSC GM-AVTOVAZ started its existence from the 27th of June in 2001 when the general framework agreement was signed by representatives of General Motors, AVTOVAZ and European Bank for Reconstruction and Development. Joint Venture was set up at the foundation meeting on the 30th of July in 2001 and was registered in Russian Ministry of Justice on the 2nd of August in 2001.

First employees were recruited on the 27th of August in 2001 and the excavation works at the site started in October.

The shareholders contributed capital is $238.2 million:

General Motors – $99.1 million by cash and equipment, 41,61%;
AVTOVAZ – $99.1 million by intellectual property (patents and trade mark on Niva 2121), buildings, etc., 41,61%;
European Bank for Reconstruction and Development (EBRD) – $40 million in cash, 16,78%, and loan facility for $100 million

Investment

The total amount of investment into the project scheduled for $338.2 million. It includes:

82.3 million – cash,
63.6 million – intellectual property,
92.3 million – equipment,
100 million – EBRD loan

Production

The total area of the Joint Venture is 142.000 square meters . It includes:

B-in-W Assembly;
Finish Body Shop (major dyes and frame body lines outsourced to AVTOVAZ);
Paint Shop (inaugurated on the 2nd of April in 2003);
General Assembly and Auxiliary Workshops;
Dispatch area with vehicles pre delivery operations;
Administrative Building.

Two general contractors were involved in the construction and equipment layout planning activities:

QuattroGemini Ltd. ( Finland ) with Russian experience over 7 years was responsible for construction of the JV buildings and connection of all needed infrastructure,
Eisenmann ( Germany ) covered the process engineering part of the project and constructed the total new Paint Shop.

The project management and engineering support was performed by the American company Hanscomb with broad expertise on project management all over the world. Hanscomb has been operating for 10 years at the Russian market.

More than 30 companies and about 1000 people from Togliatti were involved in the construction activities.

On September the 23rd, 2002 the first Chevrolet NIVA drove off the assembly line of the plant. It was acknowledged by auto journalists as a very comfortable, reliable and safe car. The entrance of the Company to the Russian market was immediately acknowledged by Grand-Prix of “Za Rulem Magazine” under category “Breakthrough of the Year”. Since then Chevrolet NIVA has been in good demand by customers. The market was introduced to a state-of-the-art, good-quality competitive SUV product.

In September 2004 on the same production line was launched a new front-wheel-drive “C”-class Chevrolet VIVA, based on Opel Astra T-3000 that was acknowledged as one of the best European cars of the time.

In early 2006, the Company built pilot Chevrolet NIVA GLX with FAM1 1.8 engine, new transmission, ABS, A/C and air bags. Following the results of safety tests according to EuroNCAP this car was given four stars.

In March 2009 the Company launched a facelifted version of the Chevrolet NIVA. Over 60 engineering changes have been implemented to improve quality of the Chevrolet NIVA.

In 2002 456 vehicles came off the JV's assembly-line, in 2003 - 25 235, in 2004 - 55 150 vehicles, which were sold not only in Russia, but also in CIS countries. Production results: 51 810 Chevrolet NIVA and Chevrolet VIVA vehicles were manufactured in 2005, in 2006 - 47 881, in 2007 - 55 052, in 2008 – 54 654 vehicles.

Since production started 290 649 vehicles were built. Approximately 10% were sold in CIS countries (data on 10.04.2009).

On the territory of Russia and CIS countries sales are executed through the network of our own dealers. At present the dealer network consists of 126 dealers in cities of RF, 7 dealers and 2 distributors in CIS countries.

According to the data of Association of European Business in RF in 2004 -2008 Chevrolet NIVA became the best-selling SUV on the Russian market. And in 2006 it was awarded with the prize 'Offroader of the Year 2006' in the category 'Compact SUV'.

Personnel

One of the main tasks of GM-AVTOVAZ is to provide the Company with qualified cadre. In this order cooperation with recruiting agencies of Togliatti and other regions, which help to assess and select employees, is realizing. Final decision of choice of a candidate is accepted after the interview of potential candidate with Department Manager and HR representative.

Selection process from Company’s employees is successfully functioning at the JV. In 2008 20 of 34 open positions were taken by the employees, wishing to achieve professional growth and to realize their potential.

CJSC GM-AVTOVAZ’s principal policy is to appoint to Foreman, Shopfloor Manager and Shift Leader positions Company employees’ candidate through assessment center activity. This allows estimating objectively competence’s development level peculiar to this or that position, to form pool of candidates by composing their rating and to make the process clear.

The Company is actively engaged in employees’ training, skills improvement, arranging certain number of hours for training for every employee in connection with targets and plans of the Company for a year.

In CJSC GM-AVTOVAZ’s arsenal there are about 40 inside courses to prepare specialists starting from induction training for every new employee and finishing with more specific and narrow-directed subjects. Besides, Company’s employees visit outside seminars and regularly have trainings at analogical GM Companies. For several years GM-AVTOVAZ successfully cooperates with Samara Institute of Business Education (SIDO) and in 2008 The Company was awarded with the certificate for professional leadership training.

JV uses the most effective practices of General Motors experience and new methods of GM University to plan and organize training. “Global Leadership Program” by GM University started at GM-AVTOVAZ in 2008. Togliatti was one of the first cities where first training sessions were leaded by the author of the program Mark Hefner.

To promote motivation there are regular awarding of the employees at GM-AVTOVAZ. The nominees are best absenteeism metrics, rationalization suggestions and sufficient work. There is also “Performance & Development Review” in the Company that lets evaluate the contribution of every employee to Company achievements.

On the 1st of April 2009 the total number of employees of the company amounted to about 1000 people.

Innovations

The Joint Venture production philosophy is based on lean production concept (GM-GMS system) which is standard for any GM Corporation facility throughout the world. The main element of this concept is how to reduce wastes of all kinds and ensure manufacturing of quality products which is achieved through strict input and output control as well as standardized procedures, personnel training and motivation. From the 1st of July in 2002 the SAP system was introduced at the plant and it is successfully operational ever since. Currently it is being upgraded and developed.

Policy in the Field of Environmental

To prevent Environmental contamination;
GM - AVTOVAZ is to carry out activity according to requirements of the Federal, regional and local legislation and requirements of Environmental Management System;
Constantly improve Environmental Management System;
To use natural resources rationally;
To demand from all personnel of the company to perform works according to working rules and norms of protection of the Environment;
To train the personnel with the purpose of a level increasing of its ecological consciousness and understanding of the personal responsibility for a condition of the Environment;
To organize works by a principle: it is easier to foresee and prevent pollution, than to eliminate its consequences;
To plan and supervise ecological parameters of the activity with the purpose of decreasing the influence to the Environment.

GM-AVTOVAZ Policy in the field of environmental

Key Goals of the Joint Venture

to become a major player in Russia and CIS regional vehicle markets by producing cars of competitive quality and of affordable prices
introduction of the quality culture,
implementation of low-cost production and procurement systems,
strengthening of Western companies confidence in Russian business,
attraction of investments into Russian automotive industry stimulating setting up the Joint Venture in auto components industry.