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Russian automaker stops production again

06 March 2009 09:13 (UTC +04:00)

Bakuâ€“ APA-Economics. vtoVAZ, Russia’s largest car maker, said Wednesday it has stopped production at its main factory once again due to a renewed dispute with parts suppliers.
The main factory in Togliatti halted production indefinitely due to a lack of parts, AvtoVAZ spokeswoman Natalya Sidoruk told The Associated Press.
The dispute between AvtoVAZ, 25 percent owned by France’s Renault SA, and its suppliers has been raging for months. AvtoVAZ is paying suppliers an estimated 70 to 80 percent in promissory notes, with the remainder in cash. Observers have said suppliers want to get paid in cash in full, as the credit crunch shows no signs of easing.
Production was halted Tuesday afternoon and resumed Wednesday morning, but stopped several hours afterwards.
"We are negotiating with the suppliers, and as soon as we reach an agreement we will resume production," Sidoruk said.
The Togliatti plant was idle for several days in early February when the suppliers halted deliveries, urging AvtoVAZ to pay them in cash.
The car maker, whose models include the iconic Lada, is suffering from low sales as the financial crisis dents the country’s wealth.
AvtoVAZ sold 29,000 cars in January this year, compared to a monthly average of 50,000 to 60,000 cars before the financial crisis.
The state corporation Russian Technologies owns a quarter of AvtoVAZ after selling a 25 percent stake to Renault last year. Investment bank Troika Dialog owns another 25 percent. The remaining quarter is floated on the market.