KAMAZ’s revenue in 2022 will decline due to a reduction in production of the most marginal modern K4-K5 models in favor of the simpler K3 models and a drop in export deliveries, according to company CEO Sergey Kogogogin.

Kogogin told reporters on the sidelines of the St. Petersburg International Economic Forum (SPIEF) that the Russian market for trucks with GVW of 14-40 tons, according to the company’s estimates, will fall by 30-40% this year from last year’s 79,000 units.

“As for our sales, the main difficulty will be with the K4 and K5 generations. In this year’s business plan we had 16 thousand K4 and K5 cars – 8 thousand cars of each generation. We wanted to finish the production of K4 cars this year, maximum by the middle of 2023, so the situation with K4 was not too critical for us. But the main story is with the K5 generation. The plan was to produce 8 thousand units this year and 14 thousand next year. And, of course, in the current situation, we lost this volume,” Kogogin told reporters.

According to him, the company has not stopped producing trucks of modern generations, but has sharply reduced their output and is now developing stocks of relevant components.

“What the Europeans did not supply us, we are trying to find somewhere in other countries. Of course, this is a rise in prices, increase in logistics costs and everything else. Still, we will eventually make several thousand K4-K5 vehicles. But not 16 thousand, but 3-5 thousand. This is painful for us, as expensive cars formed the main cash flow,” he added.

According to Kogogin, the automaker does not plan to reduce the approved plan of truck production for the year in units. “We will grow in terms of production volume of K3 generation vehicles very significantly. But this will not allow us to ensure growth in revenue figures, since K5-generation vehicles are almost twice as expensive as K3,” he said, noting that KAMAZ’s revenue will decrease at the end of the year, but did not specify by how much.

Restoring production of K5 generation vehicles is a key strategic task for KAMAZ, the head of the company added. “We have a basic platform K5, all investments we made under this platform. And, by and large, if we take into account the country’s needs in commercial vehicles today, we have no more important task,” Kogogin added, noting that “the K5 on a new component base will be produced in the first quarter of next year.”

He also said that exports of KAMAZ trucks this year, as expected, could drop by 20%.

“We had a plan (for exports for the year) of 5,000 vehicles. We are oriented that the figure will be between 4 and 5 thousand. We don’t want to lose in exports, it is a matter of principle for us,” he said.

“We have not lost our client base in exports. The main problem here is payments. Our partners do not understand well how to pay, and we do not understand it well either. The second problem is today’s exchange rate. With such strengthening of the ruble, our competitiveness is decreasing. Accordingly, exports will not be profitable for us, but at best zero. But exports are going on – contracts have been signed and we are fulfilling them. Besides, there are a number of markets that will be occupied if we stop working in them, and then we will spend years to return to these markets. We are doing everything to keep exports going,” Kogogin added.