Ukrainians Drive into Russian Auto Market
The Ukrainian Bogdan and Ukravto car companies will lay the cornerstone for their own auto plant in Russia's Nizhny Novgorod Region today. The plant will have a capacity of 160,000 cars per year, which is a record for the Russian market, as well as 6000 buses, truck and bus engines and bus chasses. The plant will be completed by 2009 with total investment of $770 million. It will produce the Chevrolet Lanos, which will compete with AvtoVAZ products.
Besides the Class C Lanos, the plant will produce the Sens, a brand that belongs to AvtoZAZ, which is part of Ukravto. It is identical to the Lanos, except with an engine made by AvtoZAZ-Motor. The Class B Chevrolet Aveo will also be assembled there under license from the Korean GM DAT.
Aveo is now being assembled at ZAO Avtotor in Kaliningrad Region. Independent expert Valery Tarakanov told Kommersant earlier, that it would not be expeditious for GM DAT to produce the Aveo at both sites. Therefore, Aveo assembly may be shut down at Avtotor when the Ukrainians' plant comes online. It accounts for only a small portion of the assembly at Avtotor, where the Lacetti accounts for more than 70 percent of production, Avtotor Holding general director Alexander Sorokin told Kommersant.
The Bogdan-Ukravto project will have a negative effect on AvtoVAZ. Russian-assembled Lanos, Aveo and Sens models will cost under $10,000, that is, in the same price segment as the new Avto VAZ Class C models that will come out of its new plant, built with conjunction with the Canadian Magna, beginning in 2010. AvtoVAZ is not commenting on the Ukrainian project, although sources had said earlier that they would not like to see mass Lanos assembly in Russia. A source there said yesterday that the Bogdan-Ukravto project has not yet received the approval of the Ministry of Economic Development and Trade. That ministry declined to comment on the project yesterday.
www.commersant.com
All the Article in Russian as of Dec. 20, 2006
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