Facing sanctions, Russia’s factory city of Lada on the brink

The city of Togliatti was built in Soviet times around the Avtovaz car factory, which produces Ladas. International sanctions are blocking the supply, leaving workers helpless.

Togliatti, a “mono-industrial” city, is one with the giant car factory Avtovaz, the largest Russian manufacturer of Renault. But international sanctions put this city and its workers at risk of being dragged into an abyss.

In a small apartment in Avtozavodsky raïon, a checkerboard district surrounding the sprawling factory that produces the legendary Lada, workers sit under the red flags of their Edinstvo (Unity) union.

“It’s a factory city. Everyone here works for the factory or for the police,” sneered Alexander Kalinin, 45, a freight elevator driver for 15 years at Avtovaz, an auto giant that owns 68% of the Renault-Nissan alliance, alongside the Russian state.

“For Togliatti, the factory is everything. The whole city is built around it,” says Irina Mialkina, 33, who has worked in a spare parts warehouse for 11 years. The construction of the factory started in 1966 with the help of Fiat in this city named after the Italian communist Palmiro Togliatti.

This city experienced glory during the Soviet era, the chaos of the 1990s and then a renaissance in the 2010s with Renault, of which Togliatti is the first factory.

With the Russian offensive in Ukraine and the international economic sanctions that followed, Togliatti and his workers are preparing for new dark times. Wages have fallen due to sanctions, components and spare parts are no longer arriving. The workers are technically unemployed and are paid two-thirds. One worker says she only receives 13,000 of her 20,000 rubles a month, or less than 140 euros.

poor working

Low wages combined with relentless inflation do not mix. In 2018, however, Renault boasted of its new industrial jewel on the Volga, which was renovated at great expense.

The French group had brought the outdated Soviet factory into modernity thanks to billions of euros in investments. But also due to staff cuts, the workforce – which amounted to 120,000 people in Soviet times – was halved in ten years, from 70,000 to 40,000 people (for a city of less than 700,000 inhabitants).

Workers are now forced to take three weeks of summer vacation in April, while Renault is considering leaving Avtovaz. The city and her employer are therefore desperate, no one at the Russian industrial giant wants to say anything.

If there are no layoffs for the time being, many employees will already be forced to take a second job.


The collapse of Avtovaz would also be that of a whole part of Russian industrial history. In an underground garage, two men in period overalls are bent over the guts of an 1980s Lada Niva, the legendary 4×4, whose freshly painted bodywork gleams red.

“From childhood my whole life has been associated with the factory. My uncle came to work there in the 70s, then my father came, then my mother and I came to them (…). All our relatives in Togliatti worked in the factory and I worked there myself. I had no other choice, everything is linked to the company,” says Sergei Diogrik.

At the age of 43, he takes care of the Lada History club, where he brings together lovers of the Soviet car from all over the world. Once a mechanic, he now devotes himself to restoring vintage Ladas.

“It was a strong production. The record at the beginning of the 1980s was 720,000 cars per year,” he says, against almost 300,000 cars produced in 2021 in Togliatti, according to the company Inovev. “It was fashionable to come here. Now it is fashionable for young people to go to Moscow or elsewhere,” Sergei laments.

But he wants to remain hopeful, because Togliatti managed to survive the chaos and banditry of the 1990s. Avtovaz and its factory city would take two or three years to reinvent itself.

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