Between 1966 and 1967, the car was also produced by the IZh military factory in the city of Izhevsk, carrying the IZh-Moskvitch-408 name — though usually called simply "IZh". This car was a rebadged version of the MZMA Moskvitch-408. It was replaced in production with the IZh-412, a copy of the M-412, starting in 1967 and up to 1976.
The M-408 was a conventional rear-wheel drive economy car powered by a 1357cc OHV straight-four, producing 50hp (37kW) at 4750rpm (60.5 SAE hp)). After 1967, the assembly of the engines was done by UZAM in Ufa. One two-barrel down-draft carburettor was used. The car was initially equipped with self-adjusting manual drum brakes, then from 1969 with power brakes with a hydrovacuum servo and a split circuit braking system.
This Moskvitch was the first Soviet-built car to have deliberate safety equipment (since 1969): crumple zones, a safer steering column, a soft grip steering wheel cover, soft interior parts, seat belts, a padded dashboard, and a split circuit braking system.
The car sold well in both the USSR and other Eastern Bloc countries and was sold for export. In the USSR, the M-408/412 was the second best selling Moskvitch for the whole 1970s decade, bested only by its successor, the 2140. In order to make it more competitive, the car was often upgraded during the time of its production and equipped with better gearboxes, more powerful 75 h.p. motors, hydrovacuum brake boosters, etc.