Interview with General Director of Aurus LLC Adil Shirinov for RIA Novosti.
Moscow, March 2 — RIA Novosti.
Interview with Adil Shirinov by Denis Ilyushenkov.
Head of Aurus: It feels like a holiday in the army
«You have been at the helm of the company for more than six months. How do you feel?»
«It feels to us perhaps like a holiday in the army — everything looks festive, but nonetheless a little tense. There’ll be a day off, but first comes the parade, dress uniform, and training.»
«So where does this military atmosphere come from? The Ministry of Industry and Trade?»
«The atmosphere comes fr om the outside world, the market, as well as the ministry, of course, and our Arab partners, Tawazun Fund.»
«But you are not a commercial company yet, are you?»
«Yes, we are a commercial company.»
«Have you sold even a single car?»
«To be able to sell cars, we first need to start manufacturing them. It’s the beginning of a long journey. People don’t buy luxury cars the same way they buy economy ones.»
«So what is the purpose of this showroom we’re sitting in?»
«This is certainly not a dealership where you come just to choose a specific modification. The idea of opening the gallery is to create the first point of public representation. Because before this, wh ere was information about the project available? Well, you saw our car on TV, or sometimes you passed one in the street. The idea of the gallery is to introduce people to the brand, to the history of its creation, the technology, and our plans for development.»
«Okay, if the project is commercial, when are you expecting to go to market?»
«For there to be commercial customers, first the project needs to be industrialized.»
«You mean the transfer of manufacturing operations fr om NAMI to Elabuga?»
«Not exactly. NAMI is a scientific and research organization with advanced engineering ideas that manufactures a significant quantity of individually assembled cars. We are not moving anything fr om NAMI to Elabuga.»
«Not even the technology?»
«Not even the technology. Production of 150 cars a year and production of a few thousand cars a year are completely different technologies, coachbuilding and conveyor production, hand welding and full automation, and the same is true for all other processes. You need to come and see for yourself. Have you been to the plant?»
«No, I haven’t.»
«Then I invite you in person!»
«Thank you! So that means the cars that are assembled at NAMI are unlikely to fall into the hands of commercial customers.»
«That is a question for NAMI. But it’s a fair question for Aurus as to whether its cars are going to be sold in 2020. Yes, if we can find the opportunity in the busy schedule that NAMI has today. Perhaps we’ll be able to find a few cars. But our goal is to create commercial projects. The first cars will be delivered to the first commercial customers in May of 2021.»
«How many pre-orders for the car do you have now?»
«So far, we have more than 700 orders including 65 at the pre-contract stage, i. e. from the clients who are ready to sign the contract.»
«What are your plans for development of the dealership network in Russia?»
«By the standards we are negotiating, Avilon-Legenda showroom is going to open in the second half of this year. I believe it will happen this fall.»
«Is St. Petersburg still part of your plans?»
«The potential geographical span could be different, and St. Petersburg is likely to be the closest point of expansion. Also, the south of Russia is very possible, and nobody’s saying that there will be no demand in the Urals and beyond. So the goal is not so much as to establish a dealership network but to provide the conditions for servicing and maintenance of the cars potential customers will purchase. Demand may arise at any place in our immense country, because the people who are likely to be interested in the car and be able to afford it don’t necessarily live only in Moscow and St. Petersburg.»
«But St. Petersburg, as I understand it, still complies with this logic, doesn’t it?»
«I believe that is true.»
«Do you have any sort of timetable?»
«I think we will come up with two more key locations before the end of this year. But the focus will still be on servicing.»
«I see. Do you get any feedback on performance of your cars from the Special Purpose Garage?»
«I’m sure they are working in close contact with NAMI.»
«What comments do your colleagues give on the car?»
«I can say that I am aware of the current communications, and the process is very good for understanding the path for further development of the project, the product.»
«How many cars has the Special Purpose Garage ordered for this year?»
«This is a question for the Special Purpose Garage. I can only say that NAMI is meeting the needs of this core customer in accordance with the plan.»
«What categories of customer are you expecting the most interest in the car from?»
«Interest is shown both by regional and federal government officials, and in the business sphere, too. So if you look at the partners we are working with, they come from all possible segments.»
«Will only the Aurus Senat be available to commercial customers at the start or will the limousine be offered too?»
«Both the Aurus Senat, and Senat Limousine will be available to commercial clients.»
«And when will it be possible to buy the Komendant SUV, in your opinion?»
«The first Aurus Senat cars for private customers are to roll off the production line in Elabuga in May of 2021, and the Komendant will follow 14 months after that, I think.»
«And what about Komendant prices? Is it still too early to ask?»
«A little bit early, yes. We are currently right in the middle of the price assessment stage. I think we will have a good understanding regarding Komendant in the second half of 2020. But as we said, prices for the entry-level Senat will start from 18 mln. rubles.»
«And what is the upper lim it for the cost of such a car?»
«It depends on the configuration. Assume someone wants customized interiors. Why not? That’s why I answer that there is no lim it for the price.»
«It is possible to make the components of Aurus Komendant SUV compatible with the so-called «Russian Prado» from UAZ?»
«As Aurus cars are based on state-of-the-art, flexible technological ideology and design solutions that will be updated on a regular basis, I believe that Aurus can be a base for other market participants. Perhaps in time they will be able to use something, too. As the same time it should be understood that these are two different projects. As for the future, it will be a question of market segments and economics.»
«How feasible do you think the idea of final assembly of these cars, and Komendant in particular, in the UAE is?»
«Speaking of the entry-level car, it will not be viable in terms of design solutions. Special editions and so forth, perhaps, but for now we can easily do that in Russia and provide customers with cars ready to drive. Economically speaking, the feasibility of this widely discussed final assembly, in the classical sense of the term, does not exist.»
«Do you get feedback from the top leaders of the UAE who were presented with an Aurus Limousine last year at DefExpo in Abu-Dhabi? What do the Arabs say?»
«Colleagues do give feedback and it is very important as it was one of the first cars, and it is necessary to consider the specifics of the region it is driven in, with its absolutely different climate conditions. So what is happening here is more like cooperation in training local specialists in the maintenance of the equipment. Not so long ago our colleagues from Tawazun Fund came to Moscow with quite a substantial delegation. They were studying the car, and the specialists from NAMI helped them understand the specifics better.»
«What do they like about the car?»
«Power, style, design. But the East is a delicate matter.»
«What do they ask be improved?»
«Customization of the interiors, especially the color palettes. The maximum possible tailoring of the car. But this is all on a case by case basis. The schedule is very busy these days. Our partners, who are also shareholders in Aurus, represent a large region, more than 20 countries, and for us it is one of the key interaction points for implementation of the commercial part of the project.»
«Will your first export deliveries be to the Emirates? Or maybe to Europe?»
«I don’t think it will be Europe. The Middle East is much more likely, and as it is our principle partner, it would be right to complete their orders first. However, some orders from neighboring countries and so forth may be completed in parallel. But the top priority will, of course, be given to our partners.»
«Have they already placed an order?»
«Of course.»
«How many cars do they want to buy?»
«Quite a meaningful number. But we still have limited supply capacity. And we are really focused on the quality of the product we are going to supply.»
«When will it be possible to supply the first cars to UAE customers?»
«So far I can only say for the Senat that in 2021 some of the first orders will be delivered to the UAE. But I hope that NAMI, with all its capacities, will be able to deal with some issues, and it will be possible to get some results this year.»
«Is China still a priority for your company as a kind of a window to the Asian market, what with the coronavirus spreading?»
«We will definitely try to participate in the China Expo that will be held in Shanghai in 2021. I hope this global problem will be solved by that time. For us, China is, of course, one of the most interesting markets, as is the whole of South-East Asia, and the Middle East.»
«It was previously stated on a number of occasions that it was possible to make some modifications of Aurus cars completely electric. Is it feasible? When could such cars appear?»
«Let me put it this way: In terms of design, the solution is already integrated in the current platform—there is a hybrid which could be made electric, and our specialists in NAMI confirm this is the case. It will depend on the demand. So the reply to your question is yes, it is possible. From an engineering standpoint it is achievable; from the point of the product strategy… it is more a question of demand.»
«Will there be other internal-combustion engines, different from the entry-level one developed with Porsche, offered for Aurus cars? Which ones exactly, and when?»
«I am sure there will be. But again it is also a question of time and product line development. For now, let us cope with the things we have planned for today.»
«Are you planning any changes in the shareholder structure of the company?»
«Yes, we definitely are. We are now at the analysis stage and looking for appropriate partners, both in Russia and abroad. In other words, we won’t be stopping here and we have no limits. It is an international project after all.»
«In that case, will you perhaps launch an IPO?»
«Why not? But of course now you will ask when. Allow us first to implement the stages of the project! To launch an IPO, we need to start selling cars.»
«What was used as the basis for evaluation of the stake purchased by Tawazun Fund (36% for 110 mln. Euro)?»
«The same things as for other large projects—potential, etc.»
«Do you plan to sell cabriolets under the Aurus brand?»
«We are potentially ready to sell cabriolets, but in due time. That’s quite a specific niche.»
«Will your cars take part in the parade on May 9 this year?»
«Of course, they have to be in the parade, especially on the 75th anniversary of the Great Victory.»
«Arsenal, the minivan of the Aurus range, has so far only been seen in the President’s cortege. Will the car be offered to private customers? Do you think there will be demand for it?»
«We have no plans for selling Arsenal to commercial customers. Let us see how the market will develop. For us, the most important thing is to stick to the product strategy, i. e. refrain from expanding before we master what we need to master, and then decide what comes next. Arsenal has already kindled significant interest in the Middle East, but we have no plans for it yet.»
«Have you seen the comparison of Aurus Limousine to Trump’s Cadillac One? Some say that our car is better.»
«It’s nice to hear of comparisons that favor the Aurus brand. But in any case it is rather difficult to compare these products, as everything changes and technologies develop. The needs and objectives for this kind of vehicle are developing, too. I’m glad that experts acknowledge the benefits of our car.»
«Will you buy an Aurus for yourself?»
«If one day I have the opportunity, I will be happy to.»