AvtoVAZ domestic car sales decreased 60% on last year to 29,100 units in January, the company has said in a statement.
 
The carmaker attributed the decrease mainly to exchange rate instability, a drop in car loans, and less consumer spending amid the global financial crisis.


AvtoVAZ didn’t export cars in the period.


However, the scale of the decline in January will throw doubt on the company’s own forecast that it will sell around 600,000 cars in Russia this year – just 6% below last year’s total.


The plan looks optimistic given that analysts are saying that the market could fall 25-50% this year. Russia’s market has gone into sharp reverse due to the financial crisis and a lack of credit availability for car loans.


However, AvtoVAZ cars are around 20% cheaper to buy than foreign brands built in Russia.

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The AvtoVAZ board has also approved the sale of 75% of its Lada brand service dealership, an AvtoVAZ board member said on Wednesday.


Board member Sergei Skvortsov told newswires that the value of the entire chain of car dealerships is estimated at between $150 million and $180 million.