Dow Jones reports that AvtoVAZ has started to assemble Lada 2107 cars at a plant near Cairo, Egypt.

The report says that Avto VAZ is aiming to build 1,000 cars by the end of the year and 5,000 cars a year from 2003.

Dow Jones adds that under an agreement with the Egyptian government, 35% of the parts Lada-Egypt uses will be locally produced, including items such as seats, windows and tyres.

Lada-Egypt President Hasan Solenan told Dow Jones that he expects high demand for Ladas in Egypt, which he said has around 135,000 Ladas on its roads.

The Lada 2107 is a modified version of a Fiat model designed in the 1960s.