Problems and achievements of Belarusian automotive holding groups

Problems and achievements of Belarusian automotive holding groups

Late November 2016 Belarus President Alexander Lukashenko made it clear that machine industry is extremely important for the country. He mentioned modern technology, export and underlined the importance of 150,000 jobs in the sphere.

Belarusian vehicles are quite popular in Russia and Europe.

However, it is not always easy to find sales destinations. This was discussed at the meeting hosted by the President. There were over 80 machine industry representatives from all the 16 Belarusian automotive holding groups.

Alexander Lukashenko, the President of the Republic of Belarus:
In 2015, the government defined a machine industry development strategy; devoted funds in order to improve production efficiency. Nevertheless, there are no positive results and somebody needs to be held accountable for that. We need to fix this situation; we need to answer this question.

There are over 150,000 people engaged in machine industry. However, in 2014, the situation started going downhill. The companies need expanding their sales geography map to succeed. Minsk Tractor Works (MTZ) can boast its contracts all over the world, but even they face some problems.

Alexander Lukashenko:
Puzzle out who sends them to such representation offices as Minsk Automobile Plant (MAZ), Minsk Tractor Works and others! Look at all the relatives and friends who earn more than our ambassadors. Do I have to do this? If they are ignoring me, we have to act.

Belarusian Automobile Plant (BelAZ) is a world famous brand. However, they face problems, too. After all, a high-powered dump truck is an expensive product.

Pyotr Parkhomchik, OJSC BelAZ (BelAZ-Holding managing company) CEO:
Our competitors are offered from five to seven years of installment payments; by law, we can only use two years.

Leonid Anfimov, Republic of Belarus State Control Committee Chairman:
If we make it four years, would there be enough working assets? You will not be able to work.

Pyotr Parkhomchik:
We take these expenses into account in our profitability projections. 2016 profitability is 24%.

Alexander Lukashenko:

Belarusian vehicles are quite popular in Brazil. They are considering an assembly plant in Ceará. Moreover, Brazilians know what they are talking about.

Antoniu Balman, Special Assistant to the Governor of the State of Ceará for International Cooperation (Brazil):
We want to see your quality goods in Brazil. It would be profitable for both Belarus and Brazil.

Here is another car fleet. You can find quite rare pieces there. And it fits in your palm. According to a Minsk collector Vadim Pokrovskiy, this hobby is a state of mind. His very first piece his mother got him in Saratov. It was a Moskvich.

Vadim Pokrovskiy, a collector:
There are a lot of collectors born in the 70’s.

These days Vadim Pokrovskiy can make mini cars himself; such Soviet cars as Zhiguli, Lada, and Moskvich. He can also build Belarusian brands.

Some people are interested in car history, other people decided to work with vehicles. According to Viktor Dominikevich, this is the thing of the future. He is a student of the Belarusian National Technical University.

Viktor Domonikevich, Belarusian National Technical University student:
An engineer must know everything about machines.

Andrey Safonov, Belarusian National Technical University engineering faculty dean:
We need to cooperate with Belarusian manufacturing plants. And introduce an IT component into the study process.

He is right, education quality is quite good. However, plants lack service and machine operators lack training.

Alexander Lukashenko:
In every country, they say they need our buses. When I ask them what the problem is, the answer is: “The plants cannot produce enough buses.” It is shocking. Work 28 hours a day but make the buses! You will get the money. But if they offer you a contract you have to take all your money, including from the National Bank chairman’s pocket, and give it to them, so they can produce what was agreed on and get the agreed money.

These days quality is a top priority all over the world.

Yuri Salapura, Scientific Secretary, National Academy of Sciences of Belarus:
These days people want to buy not the cheapest but the most quality product.

Belarusian enterprises also put quality as their top priority. They adapt Belarusian machines for other climates. They also make new designs for at least 30 countries, including those in Africa, the European Union and the Commonwealth of Independent States.

Alexander Yefimov, Udarnik plant CEO of JSC Amkodor (factory-managing company):
For hot climate regions we put an air conditioner system in the vehicle and smoked glass. We also adapted our machines to prevent overheating.

Almost every Belarusian vehicle-constructing plant can boast such hard work. Nevertheless, they are competitors. But is that a proper strategy? MAZ, MTZ, Amkodor and Gomselmash should cooperate rather than compete, the President noted.

Alexander Lukashenko:
These days economy is a war zone, and we are acting like it is not happening. It has been almost a year I am trying to drive this information home! We can only rely on ourselves, not Russia or America. There are so many problems in the world, and to survive we need to drag ourselves out of there. Today we need to talk to particular consumers and produce particular goods. We need to get on a normal development level. It is not that easy. You are smart people. Act. You are keeping out with the world, you got the trend. You have to act.

What will plant managers do? What shall we expect from automotive holding groups? We will know in the first quarter of 2017.