Russian news agency Prime-Tass reports that the net profit of Russia's largest car manufacturer AvtoVAZ is expected to total about 2.3 billion rubles this year, up from a preliminary estimate of 500 million rubles in 2002.

AvtoVAZ Chairman Vladimir Kadannikov told Prime-Tass that a decrease in the company's profits in 2002 was due to a reduction in demand for its cars due to high imports of used cars from Europe and autumn flooding in Russia's southern region.

AvtoVAZ had to halt production from December 28 to January 7 and than cut the working day from eight to six hours due to overproduction and stockpiling.

He added that this year net profit is expected to rise following the hiking of customs duties on imported cars and the expected 45.5% increase in output of assembly kits this year.

"We have had many orders for the kits coming from Ukraine, Kazakhstan, Ecuador, Egypt and Uruguay," he told Prime-Tass.

AvtoVAZ has production facilities in these countries but has no immediate plans to open new foreign-based facilities, Kadannikov said.

The company produced 708,835 cars in 2002, Kadannikov said, down from 767,313 in 2001.

AvtoVAZ expects its output in money terms to rise to 97.7 billion rubles this year from 91 billion rubles in 2002, and to produce 690,000 cars.

He also said that AvtoVAZ intends to form a partnership with a major foreign car manufacturer by the end of the year but he did not name any companies. The company already has a joint venture with GM.