Steering wheel change: how auto giants are fighting the crisis in the industry
The Russian automotive industry is experiencing a serious crisis, which has already led to a reduction in working weeks at the country's largest factories — KAMAZ, AvtoVAZ, GAZ and LIAZ. Authorities and businesses strive to minimize social losses and retain staff. What the next steps might be and how they propose to protect employees are described in the Izvestia article.
Social protection and personnel retention are a priority of the government
First Deputy Prime Minister Denis Manturov told the media that the state is closely monitoring the fulfillment of social obligations by car factories that have switched to a reduced operating mode. The Ministry of Labor and the Ministry of Industry and Trade, together with the management of enterprises, are looking for alternative employment options for employees in the "released" days in order to offset their income losses.
"The main priority is to preserve the labor collectives of enterprises, not to lose experienced specialists. We are monitoring the strict fulfillment of all obligations regarding social guarantees for employees," Manturov said.
As the press service of the Russian Ministry of Labor told Izvestia, in recent years, enterprises, including those in the automotive industry, have been actively increasing the number of employees.
"Currently, the situation in the labor market is still favorable for job seekers, unemployment remains at a low level of 2.2%, and working professions continue to be among the most in demand," the ministry said.
That is why, in conditions of a shortened working week, enterprises strive to preserve teams and organize temporary work for employees so that they do not lose income.
The government supports the initiative. The relevant act of the Government of the Russian Federation is currently under development, the press representatives of the Ministry of Labor reported.
Izvestia sent inquiries to AvtoVAZ and LiAZ car factories. KAMAZ has confirmed that all social obligations in collective agreements will continue to be fulfilled in full.
"The total obligations of KAMAZ under the collective agreement amount to over 2 billion rubles. This package includes compensation for travel, meals, rental housing for certain categories of employees, staff delivery and a huge range of social assistance," the company's press service noted.
Currently, a part-time employee support system has already been developed for KAMAZ: a labor exchange has been established to search for part-time jobs at existing sites, as more than a third of the divisions continue to work.
Gorky Automobile Plant also clarified that it will apply alternative employment and advanced training programs, as they have shown their effectiveness in past crises. Past experience will also be taken into account when working to restore full plant capacity and revitalize the market.
According to aggregated data, in 2023-2025, Russian car factories experienced a noticeable decrease in production. KamAZ, despite plans to increase the production of tractors, faced a decline in the heavy truck market by almost half, AvtoVAZ reduced the production of passenger cars by more than 50% due to problems with components and weak demand. Gas output dipped in 2024, although it increased slightly in 2025 due to increased government orders and other factors. Finally, LiAZ also reduced bus production by about half.
Izvestia sent inquiries to the Fund for the Development of the Automotive Industry, the Ministry of Industry and Trade, the Ministry of Energy, and the offices of Deputy Prime Ministers Alexander Novak, Denis Manturov, and Tatiana Golikova about the situation in the industry.
Alternative employment: options, risks and prospects
Representatives of enterprises and experts unanimously say that finding alternative employment is a difficult task.
Gleb Kinder, Vice President of Opora Russia, notes that the conversion of factories to other industries is unlikely: these enterprises specialize in mechanical engineering.
— To restore the load, it will be necessary to stimulate demand in both domestic and foreign markets. The domestic labor market depends on preferential lending and leasing measures. The external one is to support exports to friendly countries with the right pricing and service," the expert explained.
Leonid Losin, a specialist at the Institute of Regional Economics of the Russian Academy of Sciences, points out that alternative employment opportunities in cities with large car factories are limited. In order to maintain teams, we need stable workload and income, otherwise the risk of staff leakage and population outflow increases.
Andrey Olkhovsky, General Director of Avtodom Group, recalls that, in general, the state has no obligations to employ people in case of downtime. This is done by the enterprises themselves.
"Retaining key employees is a top priority, and it's quite realistic to retain professionals even with a reduced schedule," the expert believes.
At the same time, IMES Associate Professor Alexander Suetin warns that alternative employment often means transferring to less skilled and more temporary jobs with the inability to maintain the same level of pay. And this, he believes, will negatively affect the protection of workers and will require long-term support from the state.
Economists state that the reduction in working days is already affecting the incomes of employees, especially those who receive pay by the hour or shifts. Despite attempts to smooth out the effect through internal programs, unfortunately, there is social tension, says Vladimir Vinogradov, CEO of Pro-Vision Communications.
Andrey Ilyin, Dean of the Faculty of Management at RGGU, clarifies that the industry will be supported by the renewal of taxi fleets with domestic technology and preferential car loan conditions.
Measures and opportunities for long-term stabilization
The government and business are jointly forming a program to support the automotive industry, which focuses on both the economic and social components, says Sergey Katyrin, President of the Russian Chamber of Commerce and Industry.
"Alternative employment, such as retraining of employees, internal rotations and vacancies in related fields, direct subsidies to save staff, and demand incentive programs, such as preferential leasing, fleet renewal and accelerated localization, will help to stabilize the situation," the expert explains.
Anna Golikova, Director of the Interleasing Sales Development Department, recalls that the government is reviewing the strategy until 2035.
"Social support will continue through preferential loans and the Family Car program, which will help save jobs," she said.
Alexander Revsky, executive Director of the Aimars communications group, recalls that subsidies more than doubled in 2025 (to 819 billion rubles).
— Preferential car loan programs are currently being implemented, and the development of automotive components production is accelerating. The experience of the covid period — the improvement of social security packages with reduced employment — can become the basis of measures in the current crisis, the expert admits.
Artyom Berezin, technical expert at Avtopribor, emphasizes the importance of joint efforts.
— The government and the industry must work in concert. We are adapting production with the diversification of activities, taking a course towards the flexibility of personnel. Lowering the Central Bank's key rate will improve the availability of loans and increase demand in the future, the expert believes.
Forecasts and recommendations: the crisis and the path to recovery
Experts are cautiously optimistic, but emphasize that a full-fledged recovery of the car market is possible no earlier than 2027.
Gleb Kinder is confident that foreign markets and preferential financing mechanisms remain the key to long-term production utilization. At the same time, Andrey Ilyin warns of the need to more strictly control the penetration of foreign brands in order not to undermine the position of the domestic automotive industry.
Leonid Losin and Alexander Suetin agree that shortening the working week is a systemic challenge, and without stimulating domestic demand and export opportunities, specialized enterprises will not be able to overcome the crisis.
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