Russian car maker AvtoVAZ, says it has developed a programme to modernise and
increase the country’s car production using plant facilities in Togliatti, Izhevsk
and Taganrog.

"We propose to increase in Russia the production of modern cars meeting
modern environmental safety norms. To this end, it is necessary to merge the
plants along the economic integration principle, without changing the form of
ownership," chairman of the AvtoVAZ board Vladimir Kadannikov said on Tuesday.

Under the project, annual production of cars will increase to 1,400,000 within
five years, to meet estimated demand in the year 2005. The state is viewed as
an active participant in the business, Kadannikov said.

He noted that launching the production of common engines alone will require
some $US1.3 billion. AvtoVAZ is ready to provide $US500 million, but to receive
another $US800 million dollars of loans will require state guarantees.