MOSCOW, Oct 2 (Reuters) - Russia’s largest carmaker AvtoVAZ swung to a first-half net loss as the country’s economic slowdown took a heavy toll on demand.
Russian car sales have fallen for six months in a row as the $2 trillion economy has faltered. The Association of European Businesses (AEB) lobby group recently cut its sales forecast for the full year to 2.8 million vehicles, a fall of 5 percent year on year.
AvtoVAZ, which Franco-Japanese alliance Renault-Nissan plans to take control of by mid-2014, made a net loss of 2.6 billion roubles ($80.7 million) in the January-June period, against a 27.4 billion rouble profit a year earlier, it said in a statement.
The year-ago profit was boosted by a non-cash gain from discounting the cost of future debt payments and this year’s result was also hit by increased investment in new models.
The carmaker’s revenue dropped by 7 percent year on year to 83 billion roubles because of lower sales of its economy class Lada cars.
The company had earlier said that its Russian sales fell 9.6 percent in the first six months of the year to 226,729 units.
Western carmakers including Ford, General Motors and Fiat have invested heavily in production operations in Russia over the past several years, betting that the market will grow as drivers look to update old models.