Sollers will restart engine production in Alabuga

2023-06-07 15:56:03

Company “Sollers» (owns the brand UAZ) is investing 2.2 billion rubles in the launch of the production of automobile diesel engines with a volume of 2-2.7 liters at its site in the Alabuga SEZ in Tatarstan. This was announced on June 7 by the press service of the company.

The automaker attracted a concessional loan from the Industrial Development Fund (IDF) in the amount of 1.7 billion rubles for the project. Sollers noted that localization of basic parts and key technological operations will be carried out at the site. With borrowed funds, the company will purchase new equipment for the engine assembly shop, the bench test site, the cylinder head machining line, and update the software in the engine assembly shop, the release says.

The Alabuga SEZ also houses the Sollers Alabuga plant with a design capacity of 85,000 vehicles per year, which assembles light commercial vehicles (LCV) Sollers Atlant and Sollers Argo. Before American Ford left Russia, the plant in Yelabuga assembled Ford Transit vans.

Today, Sollers Atlant minibuses are sold in Russia in 23 configurations for 3.2–3.8 million rubles. They are equipped with 1.9 l (139 hp) and 2.7 l (150 hp) diesel engines. Sollers Argo are available at a price of 2.7–2.9 million rubles, equipped with 2-liter diesel engines with a capacity of 130 hp). As Vedomosti wrote on September 8, 2022, the Chinese JAC Sunray and JAC N25 / 35 became the basis for the localization of the production of these models. These Chinese models are also produced by Saryarkaavtoprom in Kazakhstan.

For January-May 2023, the group “Sollers» sold 12,549 cars on the Russian market (-1.9% compared to the same period in 2022), including UAZs and stock balances of Ford Transit.

The production of engines is included in the obligations of Sollers under a special investment contract (SPIC) with the Ministry of Industry and Trade. After making changes in September 2022, Sollers is also obliged to localize the production of key electronic modules, chassis elements, and plastic products. In general, the investments of Sollers Alabuga and supplier companies amount to more than 5.5 billion rubles. The total liabilities of Sollers Auto are 9.9 billion rubles.

Adil Shirinov, Chairman of the Board of Directors of PJSC Sollers, quoted by the press service, noted that the production of diesel engines in Yelabuga will not only increase the level of localization of the company’s LCV, but also equip UAZ vehicles with them (the plant in Ulyanovsk also belongs to Sollers).

“The long-term goal of this project is the emergence in Russia of highly localized small-capacity diesel engines for the needs of the automotive industry, as well as other industries, including special and power engineering, agricultural machinery, shipbuilding and others,” Shirinov added.

Representative “Sollers”Told Vedomosti that pilot assembly and debugging of equipment is scheduled for the third quarter of 2023, mass production of engines will begin in 2024. He clarified that the total investment (2.2 billion rubles) “does not take into account the cost of purchasing plant at Ford in 2021.”

In 2021, Sollers bought the engine assembly site in the Alabuga SEZ from Ford. Then, an investment loan from Sber CIB for 1.1 billion rubles was attracted under the deal. Until 2019, the enterprise produced 1.6-liter gasoline engines for Ford passenger cars, production was suspended due to the collapse of the American manufacturer’s passenger car business in the Russian Federation.

Independent consultant Sergei Burgazliev believes that the announced volume of investments will be enough to modernize the enterprise, but “it all depends on the level, type and amount of equipment currently available.” According to him, the process of machining and assembly of diesel engine components is almost the same as similar operations in the production of gasoline. The difference is in the components for individual motor units. Burgazliev considers the creation of a universal engine for all Sollers models to be the right and logical step.

At the same time, the expert is sure that the manufacturer initially “missed” the price of the models Sollers Atlant and Sollers Argo, which began to sell at prices above the market. “Atlant” should be sold in the price range of “Gazelle”, and “Argo” – 15-20% cheaper than “Sobol NN”, then they will be bought in larger volumes than now,” Burgazliev is sure. The cost of the Sobol NN van, according to the manufacturer’s website, starts at 2.99 million rubles, the Gazelle Business costs from 2.14 million rubles. The expert recalled that in May Sollers had already had to reduce prices for its models.

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