Russia’s AvtoVAZ, the maker of Lada cars, is on the brink of bankruptcy, Sergei Stepashin, the head of State Audit Chamber told Reuters on Wednesday.
Russia is currently deciding how best to restructure AvtoVAZ, pushed close to collapse by a major slump in Russian car sales caused by the recession.
AvtoVAZ, a quarter owned by French car-maker Renault since it took a stake in 2008, has said it would have to cut 27,600 employees — about a quarter of its workforce.
A Renault spokeswoman said Renault was working with Russian authorities and Avtovaz shareholders on a plan to safeguard the future of the Russian manufacturer.
AvtoVAZ said on Monday it had run up a loss of 19 billion roubles (€450m) in the first half of the year — 10 times the figure of the same period in 2008.
They said in a presentation to government earlier this month that they needed 70 billion roubles in state aid, while Prime Minister Vladimir Putin has publicly urged Renault to help save the company.
