Russian carmaker AvtoVAZ swings to first-half loss

Reuters

MOSCOW, Oct 2 (Reuters) - Russia's largest carmaker AvtoVAZ swung to a first-half net loss as the country'seconomic slowdown took a heavy toll on demand.

Russian car sales have fallen for six months in a row as the$2 trillion economy has faltered. The Association of EuropeanBusinesses (AEB) lobby group recently cut its sales forecast forthe full year to 2.8 million vehicles, a fall of 5 percent yearon year.

AvtoVAZ, which Franco-Japanese alliance Renault-Nissan plans to take control of by mid-2014, made anet loss of 2.6 billion roubles ($80.7 million) in theJanuary-June period, against a 27.4 billion rouble profit a yearearlier, it said in a statement.

The year-ago profit was boosted by a non-cash gain fromdiscounting the cost of future debt payments and this year'sresult was also hit by increased investment in new models.

The carmaker's revenue dropped by 7 percent year on year to83 billion roubles because of lower sales of its economy classLada cars.

The company had earlier said that its Russian sales fell 9.6percent in the first six months of the year to 226,729 units.

Western carmakers including Ford, General Motors andFiat have invested heavily in production operations inRussia over the past several years, betting that the market willgrow as drivers look to update old models.

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