MOSCOW, August 6 (RIA Novosti) - The speaker of the upper house of Russia's parliament urged the country's largest automaker on Thursday to cut the prices of its vehicles amid falling demand.
According to the Association of European Businesses, AvtoVAZ sales plummeted by 45%, year-on-year, to 151,020 vehicles in the first five months of 2009. The AvtoVAZ management made a decision in late July to suspend production in August.
"[By cutting prices] the plant could sell its non-liquid assets with up to 90,000 unsold cars stacked at warehouses," Sergei Mironov said.
Mironov also urged AvtoVAZ's management and local authorities to offer workers what he called a "coherent" program of restructuring and guarantees of employment for redundant workers to avoid protests.
AvtoVAZ employees at a plant in Togliatti staged a protest against a production freeze in August and plans to cut the working week from September.
"AvtoVAZ should have outlined to workers long ago what would happen to the plant in the future and secure funding to avoid as much as possible making workers and managers redundant," Mironov said.
Police reports said over 500 people gathered at the rally in Togliatti. The protest received the backing of the ultranationalist LDPR and the Communist Party.
"We are addressing the Russian government with a number of demands. The nationalization of AvtoVAZ is one of them. The plant should belong to the government as before, not to private owners like now," the head of an independent trade union at AvtoVAZ, Pyotr Zolotaryov, said.
In a declaration adopted after the meeting protestors accused the plant's management of "incompetence and social irresponsibility towards employees and the city at large."
AvtoVAZ obtained a seven-year loan worth 171.5 million euros ($237 million) from Societe Generale to finance license agreements with Renault in June. The company also received 25 billion rubles ($803 million) in government aid for debt restructuring in October.
AvtoVAZ, one of the largest carmakers in Eastern Europe, can produce over 800,000 cars annually. It has made more than 25 million Lada vehicles and auto components since it was established in 1970. The company currently produces 15 Lada models priced at 150,000 rubles ($4,800) to 350,000 rubles ($11,240).
