Ukraine to Pick AvtoZaZ Partner by May 1

02/25/97

Reuters reports that the Ukraine will make a final decision about which international carmaker will become the investment partner for its AvtoZAZ car plant by May 1. The Ukrainian government officially announced an investment tender to find an investor for AvtoZAZ earlier this month, and both GM and Daewoo responded with proposals. On Friday a spokesman for the government said, "the government has ordered the commission to find a consultant by March 1 and to inform the government which investment project is better by May 1."

AvtoZAZ, located in the industrial city of Zaporizhya, is the Ukraine's only car plant. Officials say the plant needs about $1 billion of investment over the next few years. Last year AvtoZAZ produced 6,881 small Tavria and Dana cars, while in 1992 it made 130,000 of them. The company's production capacity is 150,000 units. The Ukrainian government has said it is willing to negotiate about the size of the AvtoZAZ stake it will sell, between 26 and 51 percent.

GM has reportedly proposed to produce Opel Vectras at AvtoZAZ alongside the Tavrias it already makes. Initially the carmaker wants to turn out 25,000 Vectras annually and 70,000 to 80,000 Tavrias a year, there. Later it would boost its Opel production to 40,000 units a year.

Last December Daewoo said it would invest $1 billion in AvtoZAZ. The Korean car maker has reportedly proposed an annual output of 100,000 Tavrias plus the assembly of three different Daewoo models within 18 months.

Paul Dever -- The Auto Channel