Russia’s largest auto-maker AvtoVAZ is planning to boost the popularity of its Lada cars by setting up production of toy cars carrying the name of the brand, a spokesman for the company said.

“The company has signed contracts with a number of developers and makers of toy cars for the use of the Lada trademark to improve the popularity of its cars among the younger generation,” the official said on Thursday.

He denied speculations that the move was meant to improve the financial performance of the company as AvtoVAZ has a history of being a loss-making enterprise and has posted huge debts until recently.

It has been able to boost sales with the help of the state-backed 'cash-for-clunkers' program, which ended last year.

AvtoVAZ saw 2011 net profit jump 86.2% year-on-year to 6.7 billion rubles ($213 million) to IFRS.

Curiously enough, when Russia’s Ministry of Industry and Trade suggested in 2009 that AvtoVAZ should set up production of bicycles and toys to make up for dwindling car sales, the company’s independent trade union The Unity called the proposal “humiliating, ironic and unacceptable.”