Thanks to the cash-for-clunkers program launched in March, the largest Russian automaker AvtoVAZ received a profit of 1 billion rubles (32.4 million U.S. dollars) in April-June 2010, for the first time in many years, local media reported on Tuesday.
When briefing Prime Minister Vladimir Putin, AvtoVAZ CEO Igor Komarov said sales rose two-fold in the second quarter against the first quarter when Avtovaz reported a net loss of 2.58 billion rubles (83.7 million dollars).
In the last quarter of 2009, the company reported a net loss of 18.75 billion rubles (about 608 million dollars). In 2009, AvtoVAZ output fell by 44 percent, down to 349,500 units. Now the company eyes an annual output of 1.2 million by 2020.
Of this amount, 70 percent will be various models of the Lada family notorious for their poor assembly quality and obsolete design worked out as early as in 1980s.
In this respect, Putin told Komarov that it would be wrong if the plant was going to succeed thanks to production of those outdated models and not focusing on modernization of the enterprise.
"We are sending 500 workers to Renault plant this year to study the new technology," Komarov responded.