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UPDATE 1-Russia's AvtoVAZ plans to assemble Nissan cars

* Nissan eyes assembly at AvtoVAZ plants, sources say

* Russian company to halve capex

(Adds quotes, background, details)

TOGLIATTI, Russia, Sept 25 (Reuters) - Russia's carmaker AvtoVAZ AVAZ.MM plans to assemble Nissan's 7201.T class 'B' cars at its production facilities by 2012, officials and sources at AvtoVAZ and local administration told Reuters on Friday.

Such a deal could be a boon for AvtoVAZ, which a day earlier said it was slashing a quarter of its workers because the economic crisis has halved car sales in Russia [ID:nLO165798].

“Our intention is to assemble one of the ‘B’ class models offered by the (Renault-Nissan) alliance in 2012,” said Vitaly Vilchik, AvtoVAZ’s acting vice president.

Nissan has offered to organise the assembly of its cars at the AvtoVAZ factory in the Samara region, a source at the Russian company and a local official said.

“At Nissan they understand that the St Petersburg facility is not sufficient, they are counting on a recovery of the market,” the company source said.

Before the crisis, Russia had been on track to unseat Germany as Europe’s largest car market. Nissan opened a $200 million car plant in Russia’s second city of St Petersburg this summer, with a capacity of 50,000 vehicles a year. [nL21007240]

The Japanese company is an alliance partner of France's Renault RENA.PA, which holds a 25 percent stake in AvtoVAZ. The three companies are currently eyeing a possible joint venture to make car parts in Russia. [ID:nLI283570]

For its own part, AvtoVAZ will halve capital expenditure plans for the next three years, even though it hopes for state help with its development plans, Vilchik said.

“We want to receive state guarantees for loans, which are essential for investment in new projects,” he said.

“This number (capex for 2010-2012) has been reduced considerably, almost halved, and now it is around 42 billion roubles ($1.40 billion).”

The company will also stop producing the so-called “classic” models of the Lada car, boxy sedans whose design has barely changed since early 1970s, by 2012, he added.

Shares in AvtoVAZ were down 8.5 percent by 1325 GMT, at 15.00 roubles, sharply underperforming a flat MICEX index .MCX. ($1=30.06 Rouble) (Reporting by Gleb Slolyarov, writing by Gleb Bryanski and Toni Vorobyova; Editing by Mike Nesbit)

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