AvtoVAZ resumes production after month-long break

Russia`s leading car producer AvtoVAZ resumed operation at its main assembly line on Tuesday following a month-long break forced by falling demand and "unstable" social situation in the company.

According to the Association of European Businesses, AvtoVAZ sales plummeted by 45%, year-on-year, to 151,020 vehicles in the first five months of 2009. The AvtoVAZ management made a decision in late July to suspend production in August for a month.

"AvtoVAZ main assembly line has resumed its operation," a company official told RIA Novosti.

AvtoVAZ employees at a plant in Togliatti staged a protest against a production freeze in August and plans to cut the working week from September. Unconfirmed media reports also indicated that the company was planning to dismiss 27,691 workers out of the 110,000 current workforce.

AvtoVAZ, one of the largest carmakers in Eastern Europe, can produce over 800,000 cars annually. It has made more than 25 million Lada vehicles and auto components since it was established in 1970. The company currently produces 15 Lada models priced at 150,000 rubles ($4,800) to 350,000 rubles ($11,240).

However, the company has recently announced a loss of 14.2 billion rubles ($447 million) in January-June 2009 against a net profit of 1.49 billion rubles ($47 million) in the same period of 2008.

sections: Society