AvtoVAZ Plans 30% Production Hike This Year

Russia's OAO AvtoVAZ plans to boost car production 39% to 712,000 units this year, CEO Bo Andersson tells state news agency Tass.

Andersson says the increase will be driven by the launch of new Renault and Datsun brand vehicles rather that rising demand for the company's market-leading Lada cars. The Renault-Nissan alliance owns a 67% stake in the venture which controls AvtoVAZ.

Analysts predict the Russian car market will shrink at least 24% this year as low oil prices, a weak ruble and the effect of economic sanctions hurt sales.

AvtoVAZ spent much of last year trimming production. Combined deliveries of Lada, Nissan and Renault models in Russia fell more than 8% to 743,800 units, according to the Moscow-based Assn. of European Businesses. The association notes that sales declines of 15% for Lada and 7% for Renault offset an 11% gain for Nissan.