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OAO AvtoVAZ Resumes Production

Russia's largest car maker said Monday it has resumed production at its main factory despite a payment dispute with suppliers that kept it idle for two days.

MOSCOW (AP) -- Russia's largest car maker, AvtoVAZ, said Monday it has resumed production at its main factory despite a payment dispute with suppliers that kept it idle for two days.

OAO AvtoVAZ restarted production at its plant in the Volga River city of Togliatti, spokeswoman Natalya Sidoruk said. The plant will operate with two eight-hour shifts four days a week, she said -- the same as before the shutdown.

Avtovaz, 25 percent owned by France's Renault, announced Thursday it had suspended production indefinitely because of parts shortages.

Industry analysts said AvtoVAZ is piling up debt with suppliers who want the company to pay them mostly in cash instead of the promissory notes that have been used to cover 80 percent of invoices.

AvtoVAZ would not discuss the status of dealings with its suppliers Monday.

The company, which makes the compact Lada sedan that has been a mainstay on Russian roads since the 1960s, produced 801,600 cars in 2008.

The global credit crunch has hit long-booming car sales in Russia, as many banks have stopped granting affordable car loans. The swift devaluation of the ruble, which makes imports more expensive, and rising unemployment have exacerbated the problem.

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