The fact of our history: 22 years ago, in one of the shops of the Yantar ship-repairing enterprise closed in Kaliningrad, they released … the first car. Today the Avtotor plant operating instead of it (more precisely, a group of companies) is the largest enterprise in the city and region. With its difficult biography, ups, downs and, no doubt, interesting prospects …
How old is Russian Kaliningrad? The question at first glance may seem ridiculous, because not so long ago its 750th anniversary was officially and magnificently celebrated. But in fact, the Konigsberg fortress was founded in 1255, and even before that – at the beginning of the 10th century – there was the Prussian settlement of Twangste, and a little later – the Polish Krulevets … The regional center received the Soviet name only in 1946. But to consider that he is only 73 years old will not be fair, because the modern city did not grow from scratch.
And just like that, the story of the emergence of one of the largest automobile production in Russia here did not start out of the blue: there were countless working meetings of the head of the Interprivatization Fund (and before that, the Deputy Prime Minister of the USSR Government) Vladimir Shcherbakov with ministers, deputies, and leaders of the region, which with the collapse of the Soviet Union was in a very difficult situation. To the right and left are foreign states (soon becoming NATO members), and to Berlin closer than to Moscow. But the area is Russian! And in the Soviet years there was no industry here either, except for the port and a number of small defense and repair enterprises. But there was an undoubted logistical advantage – sea routes, railways and roads. So why not create modern production here?
Which one? Automotive! Why not? Firstly, the automotive industry is system-forming, and a network of suppliers, partners, and suppliers immediately arises around even a small enterprise … Secondly, behind the project initiator Vladimir Shcherbakov there were years of work at AvtoVAZ and KamAZ …
Honestly, not many believed that they would be able to do anything at all – a painfully difficult economic situation developed in Russia as a whole and its farthest western region in particular. Nevertheless, in 1994, a car manufacturing company, Avtotor, was registered in Kaliningrad. And in 1996, the Federal Law on the Special Economic Zone in the Kaliningrad Region was adopted, a presidential decree and two government decrees were signed, and a local law on supporting automobile production in the region came into force.
Things went much faster, and on May 16, 1997 the first-born came out of the workshop – the Korean Clarus sedan of the not-so-famous KIA brand. By the way, the Prime Minister of the Russian Federation Viktor Chernomyrdin and at that time the head of KIA Motors San Hong Kim cut the traditional red ribbon. Soon in Kaliningrad, three models were already released (Avella and Sephia were added). And a year later, here, in the workshop rented from the Yantar plant, the first BMW car was assembled, while the production of Korean cars moved to a new site on the outskirts of the city. Previously, the Bummash plant was located there, which, despite its peaceful name, was engaged in the production of defense products. Alas, by the end of the 1990s it was a miserable sight – the workshops were mostly abandoned, equipment was looted, the territory was littered with trash. And suddenly, just a year later, the first new workshop started operating, where they began (and using full-cycle technology!) To produce KIA Sportage off-road vehicles. This was a real breakthrough!
December 1994: Avtotor company was registered in Kaliningrad.
On May 16, 1997, the first KIA Clarus rolled off the assembly line of a plant in Kaliningrad. That year 1679 cars of three KIA models were assembled – Avella, Clarus and Rocsta.
In 1999, the plant began production of BMW 5 Series sedans.
In 2000, the total production amounted to more than 10 thousand cars.
Since 2002, the welding and painting lines were launched at the plant, due to which the production of KIA Sportage cars in full cycle mode began.
In 2004, with the production of the Hummer SUV, cooperation began with General Motors, which lasted more than ten years: in Kaliningrad, they produced various models of the Cadillac, Chevrolet and Opel brands.
In 2006, a 100,000th car was assembled.
In 2012, Hyundai joined a number of other automotive companies that collaborated with Avtotor – commercial vehicles of this brand began production at the new plant, and a year later a project was launched to produce its passenger cars.
At the end of 2012, the total number of cars produced in Kaliningrad exceeded 1 million units.
In 2018, Avtotor began manufacturing full-cycle technology (welding, painting, assembly) of three Hyundai commercial vehicle models – HD65, HD35 and HD35 City.
June 2019: a special investment contract (SPIC) was signed between Avtotor, the Ministry of Industry and Trade of the Russian Federation and the Government of the Kaliningrad Region.
For a quarter century, Avtotor managed to release a good hundred models of various brands. Basically, they were successful in the market, so the plant developed, although difficulties arose. So, the Russian crises of 1998 and 2008 did not pass the enterprise. Or: from the beginning of the 2000s, one of the major partners at that time was the world’s largest automaker, General Motors. Cooperation with him was developing successfully – tens of thousands of cars of several brands belonging to this corporation (Chevrolet, Opel, Cadillac, Hummer) were produced in the Baltic, until in 2015, Americans unexpectedly decided to curtail their activities in Russia. And ten years ago, for reasons independent of Avtotor, he had to abandon a large and very promising project with a Chinese company (alas, politics intervened).
But the two main partners have been working here for more than two decades. Almost 20 BMW models are produced at the factory, and plans are to build a new modern enterprise. And, of course, the South Korean concern Hyundai-KIA has been and remains the title partner for Avtotor: its model accounts for up to 80% of total production. At the same time, in full cycle – with welding and painting – three passenger cars (KIA Cerato, Sorento, Soul) and Hyundai commercial vehicles are already being produced.
Moreover, new workshops are opened simply at the Stakhanov pace! I visited Kaliningrad at production site No. 2, which was in the microdistrict named after A. Kosmodemyansky two years ago, and when I arrived this fall I simply did not recognize much. It seems that just recently a welding and painting workshop was opened, now three welding lines are already working, while the fourth is getting ready for a new passenger model. Cabs for commercial Hyundai HD series are brewed on a separate line …
Everything is done wisely and in relation to the volume of production: manual labor is exactly as much as necessary. Robots? They will be when a particular model reaches large volumes (from 30 thousand a year). But even today, the most modern automatic or semi-automatic equipment of leading world companies is installed on the welding lines. For example, spot welding is performed using Obara universal suspension machines, conductors are manufactured by Karmann, body geometry is checked at 580 points on a Tokyo Boeki coordinate measuring machine, and Henkel supplies are used in the painting shop. And that’s not all!
… Outside the window, as usual in autumn in the Baltic States, it is raining and … production buildings are being built. In two years, capacities only here, in the village of Kosmodemyansky, will more than double, new workshops will appear – welding, painting, assembling … Moreover, over the past 22 years, the plant has already produced more than 2 million cars that meet the highest international quality standards; over 600 million euros were invested in the creation of the production complex. Now Avtotor can produce up to 250 thousand cars a year (at best, in 2012, 265 thousand were collected). And no one will be able to reproach the company for its passion for screwdriver assembly.
Loading of Baltiysk port – 71%
Loading of the Kaliningrad Commercial Sea Port – 71%
Loading of the Kaliningrad railway – 50%
The share of all goods produced in the region is 49.5%
Taxes and fees paid by Avtotor in 2018, the share of the total amount of all taxes collected in the region is 42.1%
Payments to the Pension Fund (share of all payments in the region) – 20%
Everything is mine
Valery Gorbunov, chairman of Avtotor Holding’s board of directors, says: “For quite a long time, we did, on a full cycle — with welding and painting — only a smaller part of the models, about 20% of the total volume. The fact is that these are colossal costs, and they pay off only when the output of a particular model exceeds the level of 30 thousand units per year. But at the same time, they always acted strictly within the framework of the Law on the Special Economic Zone! The main task was to create modern production in the Baltic Sea, to ensure employment of the population. Yes, we were slowly solving the problem of localization, but we worked as a “locomotive” of the regional economy – we paid 67 billion rubles in taxes last year alone. The company employs over 3 thousand people, another 30 thousand – in related industries. In 2019 alone, 600 new employees were hired. Now we move on to the next stage, as prescribed in the SPIC, which we recently signed with the Ministry of Industry and Trade. ”
Within the framework of this agreement, in the next decade, the company will commit itself to deepening technological redistribution, localizing and ensuring full-profile production of a wide range of models with a total volume of more than 2 million cars in ten years, increasing export of products and creating new jobs. The minimum investment for this period will amount to 12.5 billion rubles. As a result, in a few years the ratio should change dramatically – approximately 80% of the cars will be produced using full-cycle technology. As part of fulfilling obligations under a special investment contract (SPIC), the plant began production on a full cycle of the new KIA Soul model, which became the third passenger car produced in this mode on Avtotor. Plans for the full cycle of the future bestseller of the Korean brand of compact crossover KIA Seltos are also provided for in the SPIC. Finally, Avtotor is even ahead of schedule in terms of fulfilling its obligations specified in the SPIC.
In addition, the plant will increase the production of commercial vehicles. The company is ready to produce trucks (up to 20 thousand per year) with a loading capacity of 0.5 to 25 tons and a wide variety of add-ons for them, construction road equipment at the automobile base.
By the way, one of the main components of success at Avtotor is considered to be the established team of more than 3 thousand professionals, many of whom have been working here from the very foundation of the company. And why should people leave? The salary at the enterprise is about 1.5 times higher than the regional average, one of the best social packages is in effect, and the created system of retraining and advanced training of personnel allows you to build a career. An example of this is the current vice president and CEO of the enterprise Vladimir Chaplya: 15 years ago, he started as an ordinary mechanic for assembly work …
The main social project of this year is the Sports and Recreation Complex (FOK), which is due to open in the village soon. Sports complex Avtotor Arena will unite under one roof a full-sized football field (complies with FIFA standards), an Olympic-class pool and several multifunctional sports halls for basketball, volleyball, wrestling, boxing, weightlifting and other sports. Up to 4.5 thousand people will be able to go in for sports here daily.
BMW 3 Series, 5 Series, 7 Series, X1, X3, X4, X5, X6, X7
KIA Cerato, Ceed, Mohave, Optima, Picanto, Sorento, Sorento Prime, Soul, Sportage, K900
Hyundai cars – Elantra, Grand Santa Fe, Santa Fe Premium, Tucson; freight – HD35, HD78, HD120, HD170
Genesis G80, G90
Full speed ahead!
In 2018, Avtotor recorded a kind of record – the launch of 31 new models, with three of them in the full production cycle (welding, painting, assembly). And all this – without stopping the existing lines! In general, the Kaliningrad enterprise is probably the only one in the world where so many models are produced simultaneously – up to 40 on one site. So what’s next? More?
“We are not faced with the task of expanding the range of production, we are deepening, not expanding,” says Alexander Sorokin, Director General of Avtotor Holding LLC. “And the project for the construction of a new plant is also not aimed at expanding production capacities, production volumes and nomenclature, but rather at deepening production technology, increasing the level of localization.”
To date, the production of seats and elements of the exhaust system, bumpers has been established in the Kaliningrad region, wiring harnesses and a number of other products are produced that are produced in the region. On the cars of the Kaliningrad plant – tires, wheels, Russian-made batteries. In a promising localization program, almost all auto components manufactured in the country are included.
However, this is far from all the plans of the enterprise. Back in 2012, Avtotor signed a project with foreign partners and investors to create an automobile cluster in the Kaliningrad Region, which was supposed to include several new factories for the production of auto components and car assembly plants, and even a new village for 50 thousand people – for employees with families. Investments from the Russian side alone should have amounted to over 600 million euros. But then another crisis occurred in the country and the project was postponed. How long? Or should we wait for the next stunning news from the westernmost region of Russia?