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11 Mar, 2010 10:36

Avtovaz approves long-term business plan

Russian car giant, Avtovaz, unveiled its plan to invest $3 billion Euro over the next decade to upgrade production and modernization, reports Vedomosti daily.

Two members of the Board of Directors told Vedomosti that one of the main objectives of the plan was to increase output and reach a total production of 1.2 million vehicles per year. One million vehicles would be produced under the Lada brand, while the other 200,000 would be under the Renault and Nissan brands.

The company is planning on getting the funds for investment through bank loans and a possible additional share issue worth 320 million Euro.

Avtovaz says that in 10 years it wants to see its output total 330,000 vehicles for each of the Kalina, B0 and C class platforms, as well as 66,000 more on four-whell drive vehicles.

Managing Driector of AG Capital, Alexandr Agibalov says the program looks real.

"Under Kadannikov, the plant spent around 300 million Euro per year on upgrades and new developments. The idea of increasing production over 1 million vehicles a year is not new."

Next week the government is to consider the proposal, from who the company is also counting on receiving financial support.