AvtoVAZ returned to profit in the first half with a net profit of $102 million

Article by Christian A., on October 10, 2010

In the first half of the year, AvtoVAZ was able to become profitable once again with a net profit of 3.1 billion rubles ($102 million). The Russian carmaker attributes the revival to state assistance and the improvement in the market. Last Tuesday, AvtoVAZ, which makes Russia's top-selling Lada model at the town of Togliatti, said that it benefited from interest-free loans given by state-controlled Russian Technologies.

In addition, car sales had been climbing. From January to June of 2010, revenue grew to 62 billion rubles compared to 53.1 billion posted in the same period in 2009.

VTB analyst Vladimir Bespalov said that the situation is “improving” and that the “second half is likely to be better.” At this time last year, AvtoVAZ was on the brink of bankruptcy as car sales plummeted amid the global economic crisis.

The state eventually had to bail out the company and it had received support from 25% shareholder Renault; however, Bespalov said that the company still has a large debt on its hands.

Bespalov said AvtoVAZ has a net debt of more than $2 billion and it has “huge capital spending requirements” to fill. He also pointed out that AvtoVAZ will soon release its new models and the success of those models has yet to be seen.

In the first half of the year, AvtoVAZ costs rose by 26.3% as it stepped up production. With the help of a government-sponsored scrappage scheme, Russian car sales increased by 51% in August compared to the previous year. [via autonews - sub. required]

Topics: avtovaz, profit

If you liked the article, share on:

Comments

Recommended

When Chevrolet came out with the 2018 Equinox last September, the facelifted model was offered in a diesel option for the first time, plus it weighed much less at 400...
by - July 23, 2017
If you are a huge fan of the hardcore GTS version, you probably know that the closest you could get to that model is the upgraded model of the M4...
by - July 23, 2017
Audi’s intention to bring out the Renn Sport Racing version of the Q5 was made clear when it unveiled the Audi SQ5 at the 2017 Detroit Motor Show early this...
by - July 22, 2017
Kia’s Sorento midsize sports utility vehicle is reaching its mid-cycle for the 2018 model year. Thus, its fans, enthusiasts and satisfied customers are expecting the Sorento to receive an update...
by - July 22, 2017
The Lotus Evora Sport 410 astonished the world after arriving as the more powerful and lighter edition of the already impressive Evora 400. Now, Lotus Cars is throwing in another...
by - July 22, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries