Russian carmaker AvtoVAZ (AVAZ.RS) Monday stepped up pressure on politicians to put up more money to help it through the current downturn and help refinance its debt mountain, saying it remained on the edge of bankruptcy.

AvtoVAZ, which is 25% owned by France's Renault SA (RNO.LN), said there is "significant doubt" about its ongoing existence as it reported that its net loss widened ninefold and it was relying on the Russian government to refinance $2 billion of short term debt. It said it was confident the Kremlin would come to its rescue.

"Without the continued support of the Russian government, (there) is a material uncertainty that gives rise to significant doubt about the company's ability to continue as a going concern," AvtoVAZ said. There are no current plans or need to shut down operations, it added.

Russian car sales have halved in the last year as banks stopped lending to consumers amid the country's worst financial crisis in a decade. The industry slump has pushed AvtoVAZ toward insolvency, forcing management to address long-standing inefficiencies - chiefly its bloated work force and outdated product range.

The company has been talking to the Russian government for weeks about aid. The Kremlin has, in turn, been pressuring Renault to put up more money to help AvtoVAZ or have its stake in the company diluted. Renault has so far shied away from making a financial commitment but has pledged technological support.

Monday, AvtoVAZ said it will spend RUB42 billion ($1.42 billion) in the "near future" on a new line of cars based on Renault's Logan model.

Renault (RNO.LN), and Japan-based 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.

AvtoVAZ's loss widened to 19.48 billion ($657.9 million) in the first half of 2009, from 2.15 billion in the same period last year. Its liabilities exceeded assets by RUB52.8 billion as of June 30, and short-term debt totaled RUB58.22 billion.

Russian automobile executives on Monday discussed government support with the industry ministry, which said it doesn't expect domestic car demand to return to pre-crisis levels until 2014.

The government will extend by nine months an elevated tariff on foreign car imports that's designed to protect domestic automakers, the official Rossiyskaya Gazeta newspaper said Monday.

AvtoVAZ, maker of the boxy Lada sedan, made almost a quarter of the cars sold in Russia in 2008. Its shares fell 2.3% on the Micex Stock Exchange, compared with a 3% gain for the Micex Index.

-By William Mauldin and Jacob Gronholt-Pedersen, Dow Jones Newswires; +7 495 937 8445; william.mauldin@dowjones.com

(Will Bland in Moscow contributed to this story.)