AvtoVAZ Will Shutdown for a Month

Russia's largest car maker, AvtoVAZ faces more problems due to the current economic climatel. Faced with plunging sales, the auto maker is expected to close its gates and suspend production for a whole month. The move will extend throughout August and will be taken in the hope of downsizing the company's current stocks of around 85,000 unsold cars.

Russia's auto market witnessed a worrying drop in sales of new cars, with many analysts predicting a 50-60% negative performance for the whole year. Russia is facing a hurtful decrease in production of cars, trucks and buses, by almost 62% to 289,000 units in the first-half of the year. ASM Holdings reported earlier this week that production of Russian-brand vehicles was reduced by two-thirds, while the foreign brands registered a 52% decrease.

AvtoVAZ's plan to put production on hold for August comes after a similar decision was made this January, when plants were closed in order to reduce its stocks from 100,000 to 80,000 units. The giant Russian carmaker draws most of its incomes from the Lada car sales.

According to Russian business daily, Vedomosti, not all car makers with facilities in Russia are planning to shutdown their production. Nissan, TagAZ, Sollers, Avtotor and GAZ Group have all reported they won't shutdown beyond the usual summer break.

GAZ Group, which is Russia's largest automotive manufacture of light commercial vehicles, trucks, buses, cars, diesel engines, power-train components and road construction equipment, has reported slight signs of recovery and announced it returns to a normal five day work week.