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AvtoVAZ head sees merger with KamAZ, GAZ

MOSCOW, September 18 (RIA Novosti) - Boris Alyoshin, last week appointed president of the country's largest automaker, AvtoVAZ, believes his company will team up with two other auto giants, KamAZ and GAZ, a business daily said Tuesday.

"I am still convinced that consolidation of AvtoVAZ, KamAZ and GAZ is imminent," he said in an interview with Vedomosti.

Alyoshin, who until recently headed Russia's Federal Agency for Industry, said it should not necessarily be a corporate merger, but a pooling of engineering capacities, including with foreign companies.

He also said that U.S. General Motors could be viewed as a strategic partner.

The AvtoVAZ president also commented that his company does not plan to raise prices for basic models in 2008 and will look for ways of cutting costs.

Last year, AvtoVAZ posted net profits of 2.5 billion rubles ($99 million), up 15%, year-on-year. The company expects revenues of 166 billion rubles ($6.5 billion) in 2007.

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