Derways may discontinue the assembly of Lifan and Chery

The circumstances at Derways car company, making full-cycle assembly of Lifan and Chery vehicles in Cherkessk, have recently gone tense. The unclear position of the company concerning the provision of government support and constant checks have resulted in neither Lifan nor Chery signing a contract with Derways for the moment, for next year’s assembly operations.

Lifan has supplied the dealers with 11,227 vehicles from January to September, and Chery has supplied 3586 Tiggo 5 and Tiggo 3 cars. The figures reflect the full load of Derways. It’s obvious that the enterprise will not survive, simply due to the lack of profitability. Lifan and Chery have declined to sign the assembly contracts for 2019, due to the unclear future of the plant.

The deputy general director of Lifan Motors Rus: Vyacheslav Galuzinsky has made the following statement: “Derways has recently decided to go for a large-scale cost reduction on unproductive expenditures: warehouses, security and idle personnel. For example, we had to transfer our assembled vehicles to another site. Our central depot is now in Moscow region, from where the vehicles are distributed to the dealers. On the other had, our logistics have now become simpler, since there were constant problems at the end of the year in exporting goods from Derways previously, such as: deteriorating weather, the road conditions in Rostov-on-Don, amongst other reasons.”

The director of Chery Automobiles Rus: Gennadi Pavlov has also confirmed that no contract has yet been signed with Chery on assembly for 2019.

Source: RusAutoNews.Com