MOSCOW Feb 10 French carmaker Renault's
struggling Russian venture Avtovaz reported
on Friday a 39 percent reduction in losses last year after
pushing through efficiency improvements and cost-cutting
Renault invested more than $1 billion into Avtovaz for an
initial 25 percent stake in 2008 but the Russian carmaker has
since fallen victim to the collapse of the local market, where
annual vehicle sales have more than halved since 2012.
But the market is now seen growing 4 percent in 2017 to
almost 1.5 million vehicles, after four straight years of
decline, a welcome relief for foreign carmakers with local
tie-ins such as Renault and U.S. car giant Ford.
Avtovaz, majority-owned by Renault and its alliance partner
Nissan, said it incurred a net loss last year of 44.8
billion roubles ($761.75 million), including impairment and
restructuring costs of 25 billion roubles.
That compares with a record loss of 73.9 billion roubles in
the previous year - a hit which prompted Renault to slash the
value of its stake in the firm by 225 million euros ($240
Revenues rose 5 percent in 2016 to 185 billion roubles,
supported by a new "prudent" pricing policy and increased demand
for its higher-end Lada Vesta and XRAY models, Avtovaz said.
The company said the improvement in its financial
performance had been helped by moves such as cutting production
to three assembly lines at its home plant in Togliatti, reducing
inventories, and further localising the production of parts.
"The company's intensive recovery measures show the first
positive trend in (its) financials thanks to the active
contribution of every employee and partner in Avtovaz," said CEO
Nicolas Maure. "Our goal is to reach the break-even point for
operations in 2018."
Sales of Avtovaz's ex-Soviet Lada brand fell 1 percent last
year to 266,000 vehicles, outperforming an 11 percent decline in
the overall market and cementing its position as Russia's
leading carmaker. In 2015 Avtovaz's sales plunged 31 percent.
($1 = 58.8117 roubles)
($1 = 0.9386 euros)
(Reporting by Jack Stubbs and Gleb Stolyarov; Editing by Greg