AvtoVAZ has given the go-ahead to a rescue plan that will help it reduce costs and move back into the black, possibly by the end of this year, the company has said.
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Russia’s largest automaker said that it needed to reduce expenditures, boost cash flow, restore profitablity and increase its market share.
The plan outlines steps to achieve these results by improving its logistics and reducing its factory stock of car components by at least 600 million rubles in monetary terms. The company also plans to reduce purchase prices of car components.
There were also moves to grant cheap loans to car buyers, a freeze on wages and a cut in executive salaries by 20%.
“The realisation (of the plan) will allow us as early as this year to lower our costs, re-establish profitability and create a solid base for the company’s development in the future,” AvtoVAZ said in a statement.
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