In latest sign of Russian economy woes, Kamaz truck company cuts working week due to market collapse
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Russia's largest truck manufacturer, Kamaz, will reduce its working week to four days starting Aug. 1 due to a dramatic collapse in the domestic heavy vehicle market, the company announced on July 25.
Kamaz cited a nearly 60% year-on-year drop in demand for commercial trucks with payloads over 14 tons as the key reason behind the move.
The crisis has led to a 28-fold decline in the company's net profit for 2024, and Kamaz shareholders will receive no dividends this year.
In a statement on Telegram, the company blamed the downturn on foreign suppliers who allegedly flooded the Russian market with excess inventory, overshooting demand projections.
More than 30,000 imported trucks now sit unsold in warehouses, the company said.
Kamaz noted that a second factor was Russia's Central Bank's tight monetary policy, which has kept interest rates high and credit access limited. As a result, more than 10,000 nearly new trucks have been returned to leasing firms and are being resold below market value.
"The lack of market growth prospects and the pressure of importers' machinery residuals force us to show responsibility and take unpopular but necessary measures to reduce production," Kamaz said, calling the shortened work week a response to "systemic distress."
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Russia's Central Bank cut its key interest rate to 18% on July 25, following a previous reduction from 21% to 20% in early June. The bank claimed that inflation and overheating pressures in the economy are declining faster than anticipated.
"Monetary conditions remain tight but have eased compared to June," Russia's Central Bank Governor Elvira Nabiullina said. "Inflation is falling, credit is growing at a subdued pace."
Kamaz is the second major Russian automaker this month to adopt a shortened work schedule.
On July 22, Avtovaz announced it would transition to a four-day week, also citing high borrowing costs and rising competition from foreign imports.
