Derways Plant Will Cut Staff If It Does Not Receive Aid From The State

  • Derways plant will cut staff if it does not receive aid from the state
      The Circassian company Derways, which produces cars of the Chinese brands Brilliance, Haima, Hawtai, JAC, Lifan, Chery and Geely, needs the help of the Russian government. 

    In the near future, the enterprise of the Derways company, located in the city of Cherkessk, plans to receive certain benefits from the Russian government, otherwise the plant may begin to lay off workers. This is reported with reference to the Deputy Minister of Industry and Trade Andrey DutovIzvestia. .

    Derways plant will cut staff if it does not receive aid from the state

    Now the management of the company, together with Sberbank, which owns 51% of Derways shares, turned to the government with a proposal to enter into partnership relations.

    The Circassian enterprise wants to get the right to manufacture cars in the industrial assembly mode, which makes it possible to import preferential components and car sets at a reduced customs rate (from 0% to 5%), while at the moment it reaches 25%, depending on the part.

    The industrial assembly mode will also allow the company to gain access to government programs to support national manufacturers (to those that are used, for example, by the largest Russian manufacturer AVTOVAZ), that is, disposal, participation in public procurement tenders, etc. to get the right to industrial assembly, Derways plans to become a partner of CJSCGroupHimex. , which is part of the structure of the capital AMOZIL. .

    Derways plant will cut staff if it does not receive aid from the state

    The Derways plant appealed to the Russian government with a request to provide equal competitive conditions for doing business, which will allow us to maintain production and jobs there, - said the source of the publication. - If there are no such steps, then the fall will be quite dramatic and we will not be able to save jobs [the company's staff exceeds 4 thousand people], but we will look at production according to the circumstances. .

    At the moment, only Lifan products are produced at the plant, the rest of the production is suspended, since there is still no agreement on volumes for 2021 with Chinese counterparties. During 2021, about 44,600 vehicles rolled off the assembly line in Cherkessk, which indicates a decrease of 9%.

    Derways plant will cut staff if it does not receive aid from the state

    Note that Chinese companies had previously wanted to get the right to industrial assembly, but the Russian government rejected requests because it was afraid for the safety of the domestic auto industry, however, after the introduction of Western sanctions, the attitude towards manufacturers from China has changed somewhat. To include them in the 166th resolution, the document will need to be revised (the second stage of industrial assembly involves an increase in the level of localization to at least 60%, the production of cars must be at least 300,000 per year, and it is also required to create research centers and production plants in Russia engines and transmissions.

    Note that some Chinese companies are thinking about the possibility of separating from the Circassian plant Derways and establishing their own production in the Russian Federation, including Chery, Brilliance and Haima. Great Wall and Haval already have local sites in Lipetsk and Tula regions, respectively.

    Derways plant will cut staff if it does not receive aid from the state

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