After the new year, DerVase may stop assembling Lifan and Chery. We reveal the details

The DerVace car company entered the Russian market at the beginning of the “zero” years with its own-developed off-road vehicle, but based on the Romanian ARO trolley. A few years later Lifan came to Cherkessk and in 2009, the assembly went on a full cycle of the Breez model. Then there was cooperation with Geely, which eventually went to its own facilities in Belarus, with Haima, which left Russia, with Brilliance, who left DerVace last year and is still limited to the sale of warehouse stocks of the V5 subcompact crossover. Yes, there was also JAC, who also left, and after the break, decided to return to Russia, but already with the Kazakh assembly cars.
Together with Lifan, which assembles all models presented in Russia at full capacity in Cherkessk, Chery remained on DerVase, leading a more cautious policy: Tiggo 5 and Tiggo 3 are made in Cherkessk, while Tiggo 2 is imported from China. From January to September, inclusive, Lifan sent dealerships 11,227 cars, and Chery – 3,586 copies of Tiggo 5 and Tiggo 3. This is all the load that DerVais has. It is clear that this enterprise will not survive – it will simply be unprofitable.
Unclear prospects for the plant caused delays in the signing of the assembly contract in 2019 by Lifan and Chery. We contacted the management of these companies.
Lifan Breez (520) became the first car of the Chinese brand, which stood on the conveyor belt “DerVais” Lifan Breez (520) became the first car of the Chinese brand, which stood on the conveyor belt “DerVays”
Vyacheslav Galuzinsky, deputy general director of Lifan Motors Rus, gave us a telephone interview, an excerpt from which we offer.
– What are the relations between the Russian representation office of Lifan and DerVase now? Is the assembly of machines going on, is the contract signed for the next year?
– To date, we continue to collect cars on the DerVase conveyor in Cherkessk, but there is no clarity on our cooperation with DerVais for 2019 yet. Due to certain circumstances, we have not yet signed the assembly contract in 2019, although we are ready to do it even tomorrow, even the day after tomorrow, as soon as the fate of “Derways” becomes clear.
– Why so many years everything was fine, and now there is tension?
– In the past few years, DerVace has been living mainly only due to our production. There is Chery, but their volumes are small. But even if we add up today’s production volumes of Chery and Lifan, it is still far from the volume for which the plant’s capacity is calculated. In addition, not so long ago, DerVace decided to drastically reduce its costs for non-production costs: storage space, security, non-production personnel. We, for example, were forced to take our assembled cars to another site. Now our central warehouse is in the Moscow region, and from there, cars diverge among dealers. On the other hand, now our logistics have become simpler, because earlier at the end of the year there were constant problems with the export of products from DerVais, say, the weather was deteriorating, causing roads in Rostov-on-Don, there were other reasons. The end of the year for DerWays was always difficult, there were always questions: “what about various types of debts”, “what are the prospects of the plant”, “how will it live further”. For example, I would be interested to know whether DerVace can count on state support, for example, in the framework of SPIC …
– There was information that at the end of last year the company could take advantage of the hibernating agreement on industrial assembly, inherited by her together with Khimeks LLC. However, why do you care about this question, it is also important for you, at what price will you buy cars from Derways?
– It is very exciting and precisely in terms of saving the price at which we buy cars from DerVais. In order for the plant to break even with such modest volumes, it will simply be forced to raise the selling price, but the state can relieve tension in this matter by providing customs privileges on the import of components. And if DerWays had a guaranteed SPIC or other state support, I would be sure that my price would not change, at least in the near future.
– How much time can you still wait, counting on the assembly in Cherkessk and, starting from what date, will you build a strategy without taking into account Derveys?
– I repeat, we can conclude the assembly contract itself tomorrow. As for the deadlines: since, as I said, the end of the year was always problematic for DerVase, we insured ourselves in advance and loaded the warehouse, and we did it even before the plant went into preventive maintenance in July. This runoff will be enough for us to quietly “go into the winter” and live to spring, so it is still quite difficult to determine this “hour X”.
– That is, can you conclude an agreement with Derveis for the assembly at the end of February 2019?