(MENAFN- AFP) Russia's biggest carmaker Avtovaz, majority owned by Renault-Nissan, said on Monday its Swedish chief executive Bo Andersson is to step down after major losses as the country's auto industry struggles with recession.
Hit hard by Russia's economic crisis, the company, which makes Lada cars, has been battling with bankruptcy fears since last month reporting a tripling of net losses for 2015.
Andersson, who came out of early retirement in 2013 to become the first non-Russian to lead Avtovaz, now "plans to step down", the automaker said in a statement.
The company's board is to meet on March 15 to pick a successor who "will lead the turnaround into its next phase of operations", it said.
The Russian car market slumped 36 percent in 2015 as international sanctions over Ukraine and the crash in oil prices took their toll on the economy.
Avtovaz suffered net losses that amounted to 73.8 billion rubles ($928 million, 847 million euros), nearly triple the 2014 figure of 25 billion rubles.
That sparked fears over the manufacturer's survival and it admitted last month that current market conditions had helped cast doubt on the "group's ability to continue as a going concern".
Based on the Volga river in the city of Togliatti, Avtovaz is majority owned since 2013 by Renault-Nissan and employs 44,000 people, not counting jobs it generates in the region for its suppliers.
The head of Russian state conglomerate Rostec Sergei Chemezov, which owns 25 percent of Avtovaz, told the Wall Street Journal on Friday that Avtovaz's owners are hammering out the details on a bailout for the beleagured firm.
Renault said last month it may recapitalise and take over Avtovaz, which weighed with 620 million euros ($680 million) on the French carmaker's accounts in 2015.
At the time, Avtovaz said it would further "optimise the workforce" as part of its "anti-crisis plan" to improve finances in 2016, having already switched all of its employees and management to a four-day week in February last year.
Swedish army veteran Andersson, a former General Motors executive, had been on a drive to improve efficiency at Avtovaz's Soviet-era facilities and slashed thousands of jobs from the bloated workforce in 2014.
Rostec's Chemezov, a close ally of President Vladimir Putin, praised Andersson for cutting costs but said he had relied too heavily on foreign suppliers instead of Russian ones and that layoffs had caused local tension, the Wall Street Journal reported.
Renault took a controlling stake in Avtovaz with Nissan in 2012 as international car makers eyed the fast-growing Russian market as a key prospect to expand business.
Renault shares in Paris slipped around midday, trading 0.4 percent lower, having initially firmed following the announcement.
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