Heavily indebted carmaker AvtoVAZ appointed Sergei Kogogin, head of truck maker KamAZ, to its board of directors, increasing the prospect for the creation of a state-controlled autos giant.
Kogogin agreed earlier this year to head a proposed holding company for government stakes in both KamAZ and AvtoVAZ, controlled by Russian Technologies — a huge state conglomerate with interests in aviation and defense as well as autos.
The move is seen as part of a long-term Russian effort to revive the country’s embattled car industry, struggling under falling demand, high debt, outdated technology and a bloated work force.
“This appointment will be connected to Russian Technologies’ plans to create an autos holding company for its stakes in these companies,” VTB analyst Vladimir Bespalov said.
“A new company may make it easier to secure new loans for AvtoVAZ, which is finding it extremely difficult to attract money. Other stakes could be used as collateral,” he added.
AvtoVAZ, which also said Friday that car sales would rise 11 percent in 2010, needs to restructure a $2 billion debt pile and reverse heavy losses to continue as a going concern.
State development bank Vneshekonombank said it was prepared to finance an investment program in AvtoVAZ after its debt restructuring is completed.
Russian Technologies has a 37.8 percent holding in KamAZ, but sources said earlier this year that it was talking to Moscow investment bank Troika Dialog about acquiring its 13 percent stake in the truck maker.
It also has a 25 percent stake in AvtoVAZ.
Germany’s Daimler, a 10 percent stakeholder in KamAZ, has first refusal on the Troika stake, but the head of its trucks division said last month it was happy with the level of the stake for the foreseeable future.
Russian plans to shake up the industry were dealt a blow earlier this month when General Motors decided not to sell its European arm to a consortium including Russian lender Sberbank.