With product upgrades, truck brand KAMAZ makes an amazing turnaround

文/品牌之声

In recent years, KAMAZ has frequently appeared on the international stage, launching a series of impressive products including new gas engine vehicles, self-driving dump trucks, and large all-electric buses. From these upgraded and innovative products, we can see Kamaz's commitment to transformation, innovation, and moving towards high-end development.

Now, with the increasing pressure of environmental conservation and the continuous expansion of application scenarios based on evolving technology, the global market's demands for traditional products are increasingly high, placing unprecedented transformational pressure on traditional industries. As a long-established heavy truck manufacturer with decades of history, the transformational practices of KAMAZ may offer us many insights.

To portray the journey of KAMAZ’s transformation, innovation, and breakthroughs more vividly and comprehensively, Forbes China conducted an in-depth conversation with Mr. Sergey Kogogin, the CEO of the KAMAZ Group.

KAMAZ-54901

Born Of Fire

KAMAZ is not only the largest truck manufacturer in the Russian Federation but also the pride of industry in the Republic of Tatarstan, one of the constituents of the Russian Federation. Over the decades of its turbulent history, KAMAZ has experienced three phases: the glory and splendor of its early years, the significant challenges it faced following the collapse of the Soviet Union, and its commitment to becoming an industry leader through constant transformation.

The KAMAZ Group was founded in the 1960s and began production in the 1970s. The planned economy provided KAMAZ with the advantage of rapid growth in size and production capacity, and its products were unique and highly successful. However, the planned economy was also as a double-edged sword, limiting KAMAZ's business direction and gradually leading it into a dilemma of slow technological iteration and difficulty in keeping pace with modern trends. This became especially challenging after the collapse of the Soviet Union and the entry of Western European vehicles into the Russian market, which led to KAMAZ's decline.

A particularly critical moment occurred on April 14, 1993, when a fire almost pushed KAMAZ to the brink of extinction. "A fire broke out at the engine plant, quickly engulfing the entire factory, destroying the plant and its sophisticated manufacturing equipment," Kogogin recalls. "From the first day of the cleanup after the fire, we worked on two fronts: rebuilding the production facility with a capacity of 100,000 engines and constructing a power unit production facility with cutting-edge manufacturing equipment." Thanks to the resilient spirit of KAMAZ and strong support from the governments of Russia and Tatarstan, KAMAZ managed to quickly resurrect itself, resuming engine production from December 1993 onwards.

KAMAZ engine production workshop

Rallied

The rebuilding of the plant and production capacity was just the beginning of KAMAZ’s reorganisation. Since then, KAMAZ has endeavoured to achieve a breakthrough through transformation and has been actively developing products that meet major international standards in order to increase its market share overseas. At the same time, KAMAZ has continued to achieve success in a number of areas based on its unique product strengths.

According to Kogogin, KAMAZ products offer the following advantages: 1. easy to maintain, reliable, high quality, and low operating costs at reasonable prices; 2. meet any customer requirements; 3. operate on all roads and in all weather conditions, including in the far north, the tropics, deserts, and high mountains; and 4. have a branch service network with warranty services in Russia and CIS countries.

"We are committed to continuously improving our products and raising them to the level of world leaders. KAMAZ has been pursuing an active, balanced and independent pricing policy, focusing primarily on market needs and optimal price/performance ratio," said Kogogin, summarising KAMAZ business policy.

Today, KAMAZ has grown to become the largest truck producer in Russia and one of the top 20 producers of heavy trucks in the world. in 2021, KAMAZ will be ranked 14th in the production of heavy trucks with a GVW (Gross Vehicle Weight) of more than 16 tonnes, and 20th among producers of trucks with a GVW of 6 tonnes.

According to Kogogin, KAMAZ has the capacity to produce 71,000 vehicles per year, with a total of about 2.4 million trucks coming off the production line to date. From the design, manufacturing and assembly of vehicles and components to sales and after-sales service, KAMAZ is able to operate the entire product cycle at a single production site.

Forbes China also learnt that KAMAZ currently conducts assembly operations in Uzbekistan, Azerbaijan, India and Vietnam. Among them, the factory in Uzbekistan will assemble diesel and gas vehicles with bulk components supplied by KAMAZ.

"Our customers cover all economic aspects of Russia and neighbouring countries/regions, such as transporters, truck fleets in regional and urban areas, natural monopolies, large enterprises, as well as enterprises and institutions operated by the government, among which are Gazprom, Lukoil, Siberian Coal Energy Company, and others. The company's products are exported to more than 80 countries in the CIS, Southeast Asia, the Middle East, Africa, Eastern Europe, Latin America and other regions," Kogogin proudly stated.

Towards High-end

Despite its track record in traditional fuel vehicles, KAMAZ is also seeking to make a transition to new energy vehicles.

"Globally, consumer interest in alternative fuel vehicles is growing, so KAMAZ is focusing its efforts on such an ambitious project as electric vehicle development," Kogogin continued. "More than 1,000 electric buses produced by KAMAZ are already on Moscow's roads. A total of ten Russian cities, including Moscow, have received this electric bus produced by KAMAZ." KAMAZ is also known to have developed the KAMAZ-6250 all-terrain shift bus based on an order from Gazprom. In addition, KAMAZ has launched its new Compass range of light commercial vehicles and produced more than 1,000 of these vehicles in 2022.

A series of initiatives led to KAMAZ great success in the passenger vehicle market. Today, KAMAZ is the number one producer of electric buses in Europe and one of the largest in the world.

One of the KAMAZ traditional focus areas remains the production and sale of gas vehicles. In recent years, in response to the Russian government's program to develop gas vehicles, KAMAZ has been actively developing and producing gas-powered cylinder trucks and buses, and the production of KAMAZ gas engine equipment is growing, Kogogin notes, adding: “Gas is a proven alternative to diesel, and the development of gas vehicles remains a strategic priority for KAMAZ."

In addition to this, KAMAZ has maintained a strong position in the market for trucks ranging from 14 tonnes to 40 tonnes GVW. In recent years, KAMAZ has extended its product line to include metropolitan delivery trucks up to 120 tons GVW and higher capacity trucks. In addition, KAMAZ launched the KMAZ-54901 cargo truck in 2020, the first representative product of the K5 series. In 2021, KAMAZ further expanded the K5 series.

"KAMAZ has continued to move forward in the high-tech sector, for example with the development of vehicles equipped with ADAS systems in 2022. Today, there is a great deal of interest in driverless mining dump trucks, so the company attaches great importance to this promising field." Kogogin went on to note that "KAMAZ Scientific and Technological Centre has developed a unique self-driving dump truck KAMAZ-6559 (Jupiter 30) dedicated to automation mode for quarry work. It is capable of transporting loose rock or ore based on remote technology, which is very valuable in hazardous areas that are not suitable for personnel presence."

In addition, Forbes China has learnt that KAMAZ driverless freight trucks have also started to appear on the M-11 Neva River federal motorway as part of the Unmanned Logistic Corridors project.

Speaking about KAMAZ’s development goals, Kogogin says: "KAMAZ’s short-term goal is to ensure Russian technological autonomy and to meet demand through domestically produced products; its long-term goal is to become a major truck manufacturer with a presence in several price segments and a broad product portfolio with a high share of localized production. We will maintain our position as the dominant player in the Russian truck market, as well as a place in the export market, and generate significant profits through after-sales services."

Discussing the future together

International geopolitics continues to create uncertainty and challenges for the business. In response, KAMAZ is phasing out imports and localizing the production of automotive components previously sourced from abroad in order to ensure stable operations, high production volumes and high financial returns. Kogogin emphasized that "we are continuing to push forward with our strategic objectives against the backdrop of unprecedented sanctions against Russia and its major players. "

In order to achieve this goal, KAMAZ will continue to actively pursue product and technology development, promote innovations in transport modes, and provide the relevant services that consumers demand. "These measures ensure continuity in the activities of the company and its suppliers and authorized dealers, offsetting unfavorable macroeconomic factors," Kogogin said.

While KAMAZ is actively transforming itself and seeking greater growth, the Republic of Tatarstan (one of the parts of the Russian Federation), where its business is located, is beginning to glow with new business opportunities and is looking forward to more international investment.

Tatarstan is the leading region in Russia in terms of investment climate," Kogogin said. KAMAZ, Tatarstan's most famous automobile brand, is open to new partnerships. Both the Republic of Tatarstan and KAMAZ have strong long-term relations with China and are grateful for this cooperation."

Tatarstan is located in the centre of the Russian Federation's large industrial zones, connecting Russia's major east-west and north-south highway arteries, with well-developed transport facilities, and is endowed with rich natural resources, a sizeable industrial and scientific complex, and a large pool of highly qualified manufacturing talent. Tatarstan is also one of the most developed constituent entities of the Russian Federation, with such leading innovation and openness parks in Russia as the Alabuga Special Economic Zone and the Innopolis Innovation Zone. Tatarstan's investment environment ranks among the top three in Russia and shows strong potential for development.

Tatarstan's trade and investment cooperation with China is getting closer. At the first Russia-China Mutually Beneficial Cooperation "Sprouting" Forum held in Kazan, the capital of the Republic of Tatarstan, in September this year, Minnikhanov, the leader of the Republic of Tatarstan, said that within the framework of the joint construction of the "Belt and Road" initiative, the Moscow-Kazan motorway is expected to be opened by the end of this year. Talia Minulina, Director of the Investment and Development Agency of the Republic of Tatarstan, said at the forum that in 2023, the trade volume between the Republic of Tatarstan and China could exceed $2 billion. She also described the trade turnover between the Republic of Tatarstan and China as $1.6 billion in 2022, which is 58 per cent higher than in 2021.

Disclaimer: The information in this publication is provided by the interviewees. It does not reflect the editorial opinions of Forbes China.

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