Oct. 6 (Bloomberg) -- Russia’s government said Renault SA agreed to help rescue automaker OAO AvtoVAZ as it scrambles to meet Prime Minister Vladimir Putin’s deadline for a plan to save the country’s debt-laden car industry.

Renault said it’s “prepared to invest in the company’s growth,” First Deputy Prime Minister Igor Shuvalov said on state television today after meeting with Renault executives. Renault owns 25 percent of Russia’s largest automaker.

Shuvalov said the amount of Renault’s financial assistance will be determined after a special government commission publishes a rescue plan for the country’s automakers, who owe creditors about 100 billion rubles ($3.35 billion) combined. The French company’s contribution will include “transferring the most advanced technologies,” Shuvalov said.

“Nothing has been agreed on yet,” said Olga Sergeeva, a spokeswoman for Renault, by phone from Moscow. Christian Esteve, head of Renault’s Russian division, said yesterday that the French company is committed to helping “find a joint solution” to the company’s problems.

AvtoVAZ and GAZ Group, the carmaker owned by Russian billionaire Oleg Deripaska, are trimming their workforce after car sales in Russia, Europe’s second biggest market in 2008, tumbled 51 percent in the first eight months of the year. The Association of European Businesses this month cut its forecast for Russian sales to 1.4 million new vehicles this year.

Two Weeks

Putin on Oct. 2 gave the government two weeks to come up with a plan to save AvtoVAZ and its smaller rivals, said Igor Burenkov, a spokesman for the Togliatti-based company.

“We’ve got two weeks to finalize how to save the company,” Burenkov said by phone today. Burenkov declined to comment on a report in the Vedomosti newspaper that AvtoVAZ may seek to raise 70 billion rubles selling new shares to pay debt.

Shuvalov will fly to Togliatti on Oct. 8 to tour AvtoVAZ and meet with workers who are upset about the company’s planned job cuts, Burenkov said. The carmaker said last month it would cut as many as 27,600 jobs, though company President Igor Komarov later said the figure won’t exceed 5,000. AvtoVAZ employs about one of every seven residents of the Volga River city of Togliatti.

Putin said Oct. 2 that Renault should help overhaul AvtoVAZ or see its stake diluted. The Russian government has already pledged 25 billion rubles in aid. The company expects to lose as much as 35 billion rubles this year, according to Komarov.

To contact the reporter on this story: Anastasia Ustinova in St. Petersburg at austinova@bloomberg.net.

Last Updated: October 6, 2009 09:02 EDT