Russian Automaker GAZ Survives By Becoming Contract Manufacturer

Russian automaker GAZGAZRussian Federation, 1928 > present5 models
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was facing imminent death when current CEO Bo Andersson took over in 2009. The company had tried unsuccessfully to branch out into building cars, but they were too expensive and had poor quality. Anderson focused on the company's strength as a light commercial vehicle maker and began using the company's extra capacity to build vehicles under contract. 

GAZ started in 1932 as a way for FordFordUnited States of America, 1903 > present92 models
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to build and sell cars in the Soviet Union. The company began designing and producing its own cars just before World War 2. It's major models where the M20 and M13GAZ ChaikaSoviet Union, 1959 > present1 photo
. The M20 was a people's car with a flathead four-cylinder engine. The M13 was among the most luxurious cars available in the Soviet Union with styling from a 1955 PackardPackard PatricianUnited States of America, 1957 > present and a 5.5-liter V8. The company has also built trucks since its beginning. 

After the Soviet Union split up, the company remained strong in truck production but wanted to build cars again. It bought the license to build the second generation Chrysler SebringChrysler Sebring (coupe) Gen.2United States of America, 2001 > 20052 versions
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and marketed the car as the GAZ Silber. It was plagued with quality issues. 

After cancelling the Silber, he decided to improve the GAZelle light truck that had been in production since 1994. He forced dealers to report to headquarters every time a truck needed servicing. This pointed out flaws with the truck that had not been addressed. GAZ found better suppliers and sales have increased since then. 

"We got the approval of ZF Sachs, Bosch, Magna and others to use their name. It helped us to say to the Russian consumer, 'This is something different,'" said Andersson. 

Because of GAZ's Soviet roots, the company has a factory with 15 times the floor space of Monaco. Anderson is reducing the company's size from 482 buildings to 50, and it still is at overcapacity. 

With the factory's extra space, GAZ has been building vehicles under contract for VWVolkswagenGermany, 1938 > present98 models
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, ChevroletChevroletUnited States of America, 1911 > present82 models
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and DaimlerDaimlerGermany, 1889 > present12 models
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from complete knockdown kits. 

Andersson's reign as GAZ CEO has not been without controversy. He has basically halved the company's workforce from 100,000 employees to about 53,000. He also reduced supervisors from 14,000 to 3,000. 

The company's future has it looking for more vehicles to build under contract while strengthening its role as a light commercial vehicle manufacturer in Russia. 

Source: Automotive News Europe