As Volodymyr Hunchyk noted, on January 18 of this year the Cabinet of Ministers of Ukraine approved by Resolution No. 56 an expanded investment program for automobile production at OJSC "Lutsk Automobile Plant," which provides for supplementing the product range with passenger cars, as well as increasing the forecast indicators for the production of buses and trucks. The revision of the investment program was preceded by a thorough analysis of market trends and the restructuring of the "Bohdan" holding, as a result of which the "Bohdan" Automobile Group was formed with three areas of activity (buses, trucks, passenger cars).
The expansion of the automobile direction is due to the fact that in 2004 the volume of sales of new passenger cars in Ukraine as a whole increased compared to the previous year by 37 percent, reaching 211 thousand.
Given the market dynamics, all previous indicators were revised and increased in the new edition. As a result, the projected cost of implementing the new investment program amounted to about UAH 1.8 billion, which is more than three times the cost indicators of the previous program. The expanded investment program is designed until 2008 and provides for the reconstruction of existing production capacities and the commissioning of new ones. In particular, at the Lutsk Automobile Plant it is planned to build a welding line, a painting complex with a capacity of 60 thousand bodies and cabs per year, and an assembly complex for passenger cars, trucks and buses. Thus, after the implementation of the investment program, the Lutsk Automobile Plant will increase its capacity for bus production to 4 thousand units per year, trucks – to 7 thousand, and passenger cars – to 53 thousand.
During the implementation period of the program, the number of jobs at the Lutsk plant will increase to 4,250 people, and the average salary will rise to UAH 2,116, which is 66 percent more than was envisaged by the previous program. The volume of budget contributions compared to the old program will increase almost 18 times.
The main sources of financing for the program are an investment in the amount of UAH 165 million in the production of buses and trucks, an issue of shares with a nominal value of UAH 648 million, and more than UAH 1 billion of reinvested profit. As a result, the charter fund of the Lutsk Automobile Plant will increase to UAH 832 million.
The "Bohdan" Automobile Group plans to invest part of the profit from the implementation of the investment program in the development of priority areas of domestic automobile manufacturing, such as the creation of engine manufacturing, especially diesel engines for buses and trucks.
Group President Oleh Svynarchuk emphasized that "Bohdan" plans to produce a wide range of models in all market segments, guided in their selection exclusively by demand.
- Our task is to organize assembly and production from various suppliers. The principle is localization of production in order to reduce costs and the best models from the point of view of "price - quality," he said.
According to O. Svynarchuk, negotiations are already underway with the Russian VAZ on expanding the model range of cars produced in Lutsk at the expense of more modern ones. Possibilities for assembling cars from other manufacturers are also being considered, he added.
Oleh Svynarchuk emphasized that the "Bohdan" Automobile Group is seeking all opportunities to sell its products on the Russian and European markets in order to avoid overproduction and underutilization of capacities.
Overall, the expanded investment program gives the "Bohdan" Automobile Group the opportunity to establish itself in the passenger car niche and become the only automaker in Ukraine represented in all segments of the automobile market.
Yaroslav Andrushko, head of the press center of OJSC "LuAZ"