Bogdan Corporation plans from the end of April to resume the operation of a passenger car plant in Cherkasy to implement an industrial program for 2013, taking into account the preliminary agreements on supplies of knock-down kits, and produce up to 15,000 cars, which is 25 percent up year-over-year.
Bogdan Corporation President Oleh Svynarchuk told journalists on Thursday that the corporation had managed to reach concrete agreements with partners and form a production plan, taking into account the introduction of an additional duty on imports of cars with 1-2.2-liter engines for three years, which will take effect from April 13, 2013.
“Now we’ve got a chance to form a new plan, and from the end of April we will start production. Along with our traditional models – VAZ and Hyundai, we have agreements with another producer, the name of which is not being disclosed now – this year we plan to start assembling two new models, on which will inform you in several weeks,” Svynarchuk said.
He said that during a month the corporation plans to finish the formation of the production plan.
“Supplies of knock-down kits from AvtoVAZ have been started, and Hyundai confirmed the shipment of its knock-down kits,” said the spokesman of the corporation, Serhiy Krasulia.
Svynarchuk noted that the plant in Cherkasy, with the annual production capacity of up to 150,000 cars, could be economically effective only if it produces at least 40,000 cars.
“Unfortunately, we’ll have to face losses and subsidize the enterprise before achieving the said volume, and we’re doing this now, but we hope that the decision to introduce the duties will allow us to achieve the volumes as soon as possible,” the president of the corporation said.
He also expressed hope that along with the introduction of the duties, a program on the development of automobile industry over the long-term will be approved.
“(The introduction of the duties) is a signal for investors that attention is being paid to the sector, and interest in the sector has returned. The government paid attention to it, and this is one of the measures that will allow the resumption of automobile production,” Svynarchuk said.
He said that this year it is planned to increase the number of employees (in 2012 workforce was halved, to 1,500 people), but as a part of the three-year strategy it is planned that the number of employees will at least triple.
The industrial assets of Bogdan Corporation include the production of cars in Cherkasy with a capacity of 120,000-150,000 cars (Lada, Hyundai and cars under its own brand) and 6,000 buses and trolleybuses per year in Lutsk.
