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. Last Updated: 07/27/2016

AvtoVAZ Plans on Track Despite Retirements

Leading carmaker AvtoVAZ, producer of the ubiquitous Lada vehicles, said Friday that company plans and projects would remain on track despite a change of senior management.

The company said in a statement two key executives, general director Alexei Nikolayev and a first deputy general director, had retired at their own request.

The two men will remain on the board of directors, according to Interfax. The new general director is Vitaly Vilchik, who already held a senior post.

"AvtoVAZ's direction with the new appointments will remain the same. We will move along the same path as before. Anyway, the chairman of the board has remained the same," a company spokesman said, referring to chairman Vladimir Kadannikov.

He said Vilchik, whose position is one of the key management jobs at the company, based in eastern Russia, had been with the plant for 30 years.

"He had responsibility for the whole budget and corporate governance for the last two years," the spokesman said.

Kadannikov said in a recent interview that his plans for the firm included the hope to pay dividends on last year's profits for the first time since 1995. He wants to attract investors to raise funds to build a new generation of Lada cars, the Kalina line, a project estimated to cost around $800 million.

Analysts are optimistic about the management shift, and Troika Dialog has upgraded its rating of AvtoVAZ stock from hold to buy. Troika said AvtoVAZ shares are currently undervalued at $18, and has a price target of $27.3.

Alfa Bank analysts have been more cautious, calling the change in management a positive step, but refrained from changing their rating of "speculative buy," reported Interfax.

AvtoVAZ's production line is outdated, but it still holds 70 percent of the Russian car market. It has a joint venture with the world's top carmaker, General Motors, that is on schedule to roll out the first Chevy Niva from their Tolyatti plant in September.

(Reuters, MT)