Ukraine’s leading auto manufacturing conglomerate and world giant GM have formed a JV to manufacture Chevy Aveo cars at a Warsaw plant
Ukraine’s leading auto manufacturing conglomerate, Kyivbased Ukravto Corporation, and world giant General Motors, have formed a joint venture to manufacture Chevrolet Aveo cars at the Warsaw-based Fabryka Samochodow Osobowych (FSO) car production plant.
GM and Ukravto announced their intention to create the venture on Nov 6 after having earlier expressed their interest in such a joint project.
According to preliminary agreements, 60 percent of the newly created venture will be owned by Ukravto and the remaining 40, by GM.
Ukravto’s press service said that the “total amount of investments into the Warsaw joint venture, in which Ukravto will have 60 percent, will exceed $600 million… $125 million has already been invested into equipment and production launching.”
Ukravto’s existing joint project with GM has the Ukrainian company assembling and distributing Chevrolet cars in Ukraine, where the brand already has more than an 8 percent market share, according to Ukravto.
Tariel Vasadze, a lawmaker and Ukravto Corporation’s president, said: “We are starting a new stage of development at FSO together with our long-time partner, the world leader in the automobile market, General Motors.”
The new joint venture sets ambitious goals in terms of production. In 2008, it plans to manufacture 60,000 units, and by 2009 the plant intends to increase production by 100,000 cars per year. The initial stage of production at FSO will create more than 1,000 jobs for Polish workers.
According to Ukravto, demand in Europe for Chevrolet cars this year increased year-on-year by 32 percent compared with 2006. Cars manufactured in Poland will be marketed in the EU, Ukraine and Russia.
The new joint venture will also manufacture other Chevrolet models, notably two new hatchbacks along with the four-door Aveo.
The Zaporizhia-based Ukrainian auto manufacturing plant, known as AvtoZAZ, itself 80 percent owned by Ukravto, acquired FSO, Poland’s biggest car manufacturer, in 2005. The plant has produced more than 4 million cars in the last 56 years. It is equipped to produce up to 220,000 vehicles per year.
GM official have said the Chevrolet Aveo cars to be produced at the plant would be the first made on EU turf.
They have said that up to 7,000 cars would be assembled this year.
GM has in recent years boosted efforts to produce and sell cars in former Soviet countries, where car sales have boomed. The auto giant is currently mulling the possibility of launching additional production capacity in Russia, where its car sale volumes are reaching European market levels.
This year, GM expects to sell about 250,000 vehicles in Russia.
The corporation has been operating car assembly joint ventures with AvtoZAZ in Ukraine and AvtoVAZ in Russia. GM said it plans to launch the operation of a Greenfield plant in St. Petersburg, Russia in the second half of 2008.
