UPDATE: Russia's AvtoVAZ to Spend RUB42 Billion on New Car
October 12 2009 - 4:01AM
Dow Jones News
Russian carmaker AvtoVAZ (AVAZ.RS) said Monday it will spend
RUB42 billion ($1.42 billion) in the "near future" on a new line of
cars based on Renault SA's (RNO.LN) Logan model.
France's Renault and sister company Nissan Motor Co. Ltd
(7201.TO) are expected to provide up-to-date technology for the
modernization of AvtoVAZ production, Russian Deputy Prime Minister
Igor Shuvalov said in a release from the carmaker.
Renault said last week it would provide additional support to
AvtoVAZ, although not necessarily in the form of cash, after the
Russian government vowed to boost its bailout of the loss-making
firm.
AvtoVAZ, which is 25% owned by Renault, will concentrate on
producing a car based on the low-cost Logan platform.
AvtoVAZ Chief Executive Igor Komarov and other Russian car
chiefs are meeting with the government today to discuss support for
the industry.
AvtoVAZ's liabilities as of June 30 exceeded its assets by
RUB52.8 billion, it said Monday on its Web site. Short-term debt
totaled RUB58.22 billion.
AvtoVAZ, maker of the boxy Lada sedan, made almost a quarter of
the cars sold in Russia in 2008, and the industry slump has pushed
the company toward insolvency. This has forced management to
address long-standing inefficiencies -- chiefly its bloated work
force and outdated product range.
-By William Mauldin, Dow Jones Newswires; +7 495 937 8445;
william.mauldin@dowjones.com