Maxim Sokolov

Maxim Yuryevich Sokolov, President and Chairman of the Management Board of AVTOVAZ JSC since 2022, answers questions from Evrazimut. He previously served as Minister of Transport of the Russian Federation and Deputy Governor of St Petersburg, led a major real estate development company, and holds a Candidate of Economic Sciences degree (the Russian postgraduate qualification equivalent to a PhD in Economics).

— Maxim Yuryevich, I would like to begin with a question about talent. Russia has always had a lot of strong engineers and natural-born innovators. In terms of ideas, how does AVTOVAZ work with people today — how do you find them, help them develop, and take their ideas all the way to creating a real production vehicle?

— Our country has always been rich in talent. At AVTOVAZ we understand how important it is to attract young, creative, highly qualified personnel. This work begins literally at school level.

Several years ago, AVTOVAZ acted as patron to virtually every educational institution in the Avtozavodsky district of Tolyatti: forty schools, as well as eight technical colleges and vocational training schools. Together with Togliatti State University (TGU) we won a grant from the Government of the Russian Federation to establish an Advanced Engineering School, which is already up and running. Each year around 300 TGU graduates join us at the Research and Technology Centre, on the production floor, and in other AVTOVAZ divisions. That is the foundation for young people to develop their skills.

Our connections are not limited to Tolyatti and Samara. We have agreements with MADI (Moscow Automobile and Road Construction State Technical University), the leading higher education institution for the automotive industry, where I chair the Board of Trustees; Bauman University (Bauman Moscow State Technical University), one of Russia’s top technical universities; MIFI (National Research Nuclear University MEPhI); St Petersburg Polytechnic University; the Stieglitz Academy (St Petersburg Stieglitz State Academy of Art and Design); Kazan University; Ural University; and many other universities. What we commission from them are not simply research studies but specific technical developments that form the basis of future vehicles.

AVTOVAZ’s main Research and Technology Centre has historically been based in Tolyatti, but today it has branches and partner engineering centres in Moscow and St Petersburg as well. It is precisely this system that creates the conditions for engineers to develop and lead the industry forward.


— So, to be candid, the main historical problem of the Russian automotive industry was not a shortage of talent, but the absence of a system that would allow talent to flourish? What are you changing in that respect?

— There were many reasons. The Soviet automotive industry began long before AVTOVAZ, which celebrates its sixtieth anniversary this year. As early as the 1920s, NAMI (the Central Scientific Research Automobile and Automotive Engines Institute, Russia’s main state automotive R&D institution) began systematically advancing the country’s motorisation. The domestic industry performed particularly strongly in the post-war years. The Pobeda, the Volga, the GAZ‑21, KAMAZ, GAZ, Ural were all created by strong teams whose products were competitive by international standards.

AVTOVAZ, established in cooperation with Italian FIAT, very quickly built its own engineering school. The Niva, which was ahead of its time, is its most legendary achievement — next year marks fifty years since that model went into production. For the 1970s, it represented an enormous leap forward: unibody construction, four-wheel drive, and versatility for both urban use and demanding off-road conditions.

The Soviet and Russian automotive engineering tradition is an integral part of the global automotive industry. And I am convinced it will remain so in the future.


— Russia today has materials, a market, and intellectual capital. If one thinks of Japan, it developed largely through a culture of manufacturing and assembly, despite having almost no raw materials of its own. What are our growth drivers today?

— Japan is a very instructive example. It made an enormous leap forward by relying on its own engineering talent and export markets. Developing any industry requires a large volume of resources — financial resources above all — and the size of the domestic market is often a limiting factor.

Japan bet on exports, dramatically expanded its capabilities, and acquired what it lacked: materials, energy, and technology. That example can be useful for us too.

At the same time, Russia has always been in a stronger position in terms of materials and resources. Even the current constraints arising from sanctions pressure have provided an impetus for the development of domestic capabilities: the chemical industry, new polymers, paints, rubber and technical rubber products (RTI — rezino-tekhnicheskie izdeliya), electronic components. This also applies to more advanced technologies, including artificial intelligence.

But there is a constraint: financing. Sanctions have narrowed access to international technologies and export markets, thereby limiting capital accumulation. That is why today we rely primarily on our own capabilities and the capacity of the domestic market.


— What does Russia need for genuinely original vehicle designs to emerge — rather than variations built on foreign technological platforms?

— A great deal depends on state policy. It is important that the drive for technological sovereignty and the security of domestic production is combined with the search for sources of development and market saturation. Equally important is balance: building domestic production capacity while using the best global technological practices wherever that is possible.

In the current environment, the range of available partners is limited, but this symbiosis remains essential. It should form the foundation for the future development of the Russian automotive industry. We must draw on both the production capacities created in Soviet times and the manufacturing facilities built by international automotive groups in the twenty-first century — in St Petersburg, Kaluga, and other cities. Those assets too must be put to use, with new partners.

— You have repeatedly emphasised the importance of a balance between technological sovereignty and complete independence. What does that mean for AVTOVAZ in practice? Where does the line fall between cooperation and dangerous dependency?

— It is impossible to interpret technological sovereignty literally as manufacturing every component — from washers to the most complex electronics — domestically. Cooperation is essential; it is cooperation that ensures competitiveness.

But the AVTOVAZ case is very instructive here. In May 2022, the previous shareholders essentially switched off the power and left. A plant integrated into international supply chains came to a halt.

It was thanks to our engineers, design engineers, process engineers (tekhnologi — specialists in manufacturing processes and production technology), and suppliers that we managed to restart this mechanism. AVTOVAZ has more than 1,600 suppliers. Restarting a mechanism of that scale was enormously difficult, but the team managed it in literally two months.

Today AVTOVAZ is no longer critically dependent on foreign component supplies. Some foreign content remains, but it is no longer possible to stop the assembly line in this way. The plant will keep running.

By 2024, we had reached the highest production volumes and assembly-line throughput in AVTOVAZ’s modern history. One vehicle rolled off the line every twenty-two seconds. That sustained employment for nearly 50,000 people within the company and more than half a million across related industries throughout the country.

The automotive industry is a cornerstone of demand across many sectors and a powerful source of synergy for the entire industrial economy of Russia.


— As for the export direction of the Russian automotive industry, which has clearly shifted from West to East, how does AVTOVAZ see its export strategy today? Which markets can already be called promising?

— Export matters to AVTOVAZ, although it does not yet play the role it played in the Soviet period. Then, the company exported around 300,000 vehicles per year to more than 100 countries. The Niva alone was shipped to nearly 100 countries, and around 5,000 vehicles went to Canada every year.

Today the volumes are considerably smaller. This is linked both to sanctions pressure and to the development model that existed under the previous shareholders. The Renault-Nissan-Mitsubishi Alliance (the multinational automotive group that held a controlling stake in AVTOVAZ from 2012 until its withdrawal in 2022) was primarily interested in promoting its own products. Nonetheless, the LADA brand has traditionally been in demand in the CIS (Commonwealth of Independent States) countries and in a number of other markets.

By the end of 2024, we were exporting to more than 20 countries, and we aim to reach 25 by the close of 2026. Our product retains competitive advantages in traditional markets, primarily the CIS countries.

At the same time, the expansion of Chinese automakers creates serious competition. China’s scale of production gives it clear unit-cost advantages. The greater the volume of component production, the cheaper the vehicle — there is a direct correlation.

It is clear that replicating the export volumes of the Soviet period is hardly possible today. But we can fight for our traditional markets in the Eurasian Economic Union (EAEU), the CIS countries, and certain destinations in Asia, Africa, and Latin America — particularly in niches where models like the Niva are strong.

There is one further factor that may sound counterintuitive: a strong rouble hurts exports. It makes Russian products more expensive on external markets, though it helps to reduce procurement costs. On top of that come sanctions and the tariff policies of individual states. Nevertheless, exports remain part of our strategy.


— So, you do have expectations of export sales growth in the coming years?

— We aspire to it, but there are objective factors that may constrain that growth. Beyond financial conditions, these include serious sanctions pressure and an uneven competitive environment, including the impact of customs and tariff regulation.


— How realistic is it that LADA becomes a noticeable player not only in the CIS countries but also, say, in Asia?

— It is possible, and certain steps in that direction have already been taken. Last year we opened a dealership in the United Arab Emirates, in Dubai, on one of the main automotive thoroughfares. We began exporting to Oman, Yemen, and a number of other African and Asian states.

But compared with the scale of Korean, Japanese, and especially Chinese manufacturers, it would be unrealistic to speak of comparable volumes. We can compete for specific niches, in countries still in the early stages of motorisation, where the roads are not yet good and vehicles with reliable driving characteristics are in demand.

AVTOVAZ vehicles remain repairable in the field and comparatively inexpensive to operate. For many markets that is a significant factor. Our strategy, moreover, is not simply to sell cars but to build a network of partners and dealers who will provide after-sales and warranty service. Among potentially interesting destinations I would mention the Philippines and Vietnam, for example.


— In April last year the company launched production of the LADA Iskra. In your view, how well has the model already taken hold in the market?

— Today the LADA Iskra is our most advanced product. It was developed in the shortest possible timeframe on a technological platform whose foundation came to us from the previous shareholder, but over which we have now achieved full sovereignty.

This is what genuine technological sovereignty looks like: independence both in production and in engineering intellectual property. Today all the platforms on which AVTOVAZ manufactures its vehicles are fully independent from the standpoint of engineering design and technology.

We delivered the Iskra project in just over two years. The vehicle entered series production on 19 April 2025 — the fifty-fifth anniversary of the first VAZ-2101. Sales began in the autumn, and by the end of last year nearly 7,000 vehicles had been sold.

By early April of this year, we had already produced and sold more units than in the whole of last year. We see the product developing very dynamically, winning market share, and strengthening the LADA brand’s position in a highly competitive environment. I am confident that the LADA Iskra has a strong future ahead of it.


— You have mentioned that AVTOVAZ is developing a plug-in hybrid based on the LADA Azimut crossover. How did the idea for this project come about, and what stage has it reached?

— Speaking of the LADA Azimut project as a whole, this is our future flagship. It is not yet in series production, although pre-series units are already being assembled on the main production line. The start of sales — the SOP (Start of Production) milestone — is planned for the third quarter. We are already welding bodies, painting them, assembling vehicles, and running tests so that from the very first day of production the customer receives a high-quality vehicle.

At the same time, we are thinking about the model’s future. Development of a LADA Azimut with a hybrid powertrain is still at the engineering feasibility stage, but by the end of the year, in the autumn, we will build a prototype. Hybrid technologies are becoming increasingly popular both in our market and globally, so AVTOVAZ is following the leading engineering trends.


— Will this hybrid be able to genuinely compete with models already on the Russian market in terms of value for money, or is it for now more of a technological statement about the future?

— For now, it is a technological statement about the future. A great deal will depend on the market, the regulatory environment, and the rules of the game. If support for domestic automakers continues, we will feel more confident.

We expect our future flagship LADA Azimut to sell well and win market share from its very first days. That will provide resources for further development of the model and the adoption of new powertrains.


— What specifically does AVTOVAZ plan to present at SPIEF-2026 (St. Petersburg International Economic Forum), and which of those presentations might be a genuine revelation for the market?

— The St. Petersburg International Economic Forum (SPIEF — Peterburgsky Mezhdunarodny Ekonomichesky Forum) is traditionally a significant venue for us, all the more so since one of AVTOVAZ’s plants is located in St Petersburg. Last year at SPIEF the LADA Azimut was, one might say, the star of the show.

At the forum in June this year, we plan to present a new and interesting product. The LADA Aura, which has already been shown at the St Petersburg venue, will now be used for transporting the forum’s guests and participants. We will provide the organisers with over one hundred of these vehicles, and the LADA Aura will become the principal car for getting participants around. We are grateful to Roscongress (the Russian state foundation that organises SPIEF and other major forums) for this opportunity.

The LADA Iskra, produced both in Tolyatti and at the St Petersburg automotive plant, will also be on display at the St Petersburg regional stand. The Samara Region stand will showcase our future flagship, the LADA Azimut. Moreover, distinguished guests of the forum will already be able to ride in these vehicles — not last year’s prototypes but the very cars that will shortly start coming off the Tolyatti plant’s assembly line.

— Thank you for the interview. And, before we finish, just a few words in closing.

— In conclusion, I would add that the chance to get behind the wheel of our vehicles is by no means limited to SPIEF. AVTOVAZ traditionally provides its products for significant motor rallies (avtoprobegi — cross-country driving events) across Russia and the CIS countries.

At the moment, for example, preparations are underway for a motor rally marking the seventieth anniversary of relations between TASS (Russia's state news agency) and China’s Xinhua news agency. On Chinese territory, the rally will use Chinese vehicles; in Russia, along the route of the Golden Ring (the historic circuit of ancient Russian towns northeast of Moscow), it will use LADA vehicles — primarily the LADA Aura, though the Iskra will also take part, and possibly even the LADA Azimut before its official market launch.

And this winter, to mark the anniversary of the lifting of the Siege of Leningrad, a rally was organised along the Road of Life (the ice road across Lake Ladoga that supplied besieged Leningrad during World War II) using LADA Iskra vehicles. I should note that the Soviet military operation that broke the Siege of Leningrad bore the same name — Operation Iskra ('Spark') — so the rally carried particular symbolic weight and resonated deeply with St Petersburg residents.

The interview was conducted by Vlada Lepikhina.