OREANDA-NEWS. April 27, 2010. AvtoVAZ vice-president Oleg Lobanov stated that due to a ‘poor’ market in January the company was not able to hit its sales projections for 1Q10. AvtoVAZ showed a RUB4bn (USD133mn) net loss, which is almost eight times lower than 1Q09, according to Vedomosti.  Lada sales decreased by 36% YoY (37,455), as the overall market fell by 34% YoY (165,862), reported the press-centre of OTKRITIE FC.

View: According to our forecasts, the ‘cash for clunkers’ certificate program will be completed in mid-summer. Because AvtoVAZ is the main beneficiary of this program, we expect a 20% decrease in AvtoVAZ sales once the ‘clunkers’ program is over.

Valuation and Action: We view these figures as negative for AutoVAZ stock.