AvtoVAZ plans to increase production by 55.7 percent in March, month-on-month, in response to anticipated higher demand from the government’s ‘cash for clunkers’ programme.

The firm hopes to break even by the end of this year with a sales plan of 400,000 units.

New car sales in Russia fell 37 percent in January 2010 from a year earlier, but the scrappage scheme starts in March.

Analysts say that the Russian car market is unlikely to slip much further after its 2009 crash, but hopes are very much pinned on the scrappage scheme stimulating demand.