Struggling to Compete

Accoding to the General Director of Russia's largest car manufacturer, AvtoVAZ, the company needs annual investment of $240 million for required model upgrades.

This year, the company upgraded the outdated rear-drive Lada-2107 and Lada-2105 models to meet Euro-2 environmental standards.

In November, the company plans to launch the production of its VAZ-1118 Kalina car. The company has also been developing a new Lada-2170 model.

Despite the improvements, demand for the Russian car has gone down as foreign competition increases. In 2003, the company produced 699,889 cars, down 0.4% on the year.

This year AvtoVAZ plans to produce 684,800 cars