Competition on Ukrainian Car Market Getting Tougher
OREANDA-NEWS. Ukraine's second-largest automobile producer Automobile Plant Bogdan increased its automobile output by 8.7% to 31,697 vehicles from January to August 2007.
Overall, concern LUAZ recently upgraded its 2007 output forecast from 50,500 vehicles to 55,000 vehicles (+35% y/y), a report published by financial services provider Millennium Capital (MC) says. It is estimated that the company's revenue will grow much more than its output due to the increasing share of middle-priced automobiles in total output. According to our MC, in 2007 LUAZ revenue will be USD 775-820mn (+83-94% y/y).
At the same time, Ukraine's largest automobile producer, Zaporizhzhia Automobile plant (ZAZ), which is managed by UkrAvto, is going to set up an extra assembling line and modernise the existing one by 2009. Both of the lines will produce bodies for Lanos models. As a result, the company is expected to increase its output of Lanos bodies by 206% from 15 to 46 per hour. The company plans to invest USD 80mn into production capacities in 2008. The increase in capacity will result in an extra 120,000 cars produced domestically per year. But, according to the company's management, only half of Lanos' output will be sold in Ukraine and the rest will be exported to Russia. As a result, 30,000 extra Lanos models will be delivered to the Ukrainian market.
In the view of experts, this is a negative news for Automobile Plant Bogdan which produces VAZ models, the Lanos' main competitor in the low-priced segment.