Ukraine's AvtoZAZ Still Up for Tender

12/31/96

Reuters reports that a Ukrainian official called media reports concerning a deal between South Korea's Daewoo and Ukrainian automaker AvtoZAZ premature. The official, Valery Lytvytsky, said, "there is still a tender going on for AvtoZAZ."

Lytvytsky's statement contradicts reports that had said Daewoo had agreed to modernize the Ukrainian AvtoZAZ plant. After a Thursday meeting between Daewoo and Ukraine's President Leonid Kuchma, Ukrainian media reported that Daewoo was prepared to invest more than $1 billion in AvtoZAZ. The official DINAU news agency said "a strategic agreement about the participation of Daewoo in the reconstruction of our automobile plant and the beginning of dual manufacture was accepted," and added that 300,000 vehicles would be built annually.

Daewoo's chief Ukraine representative would not comment on the reports, but said, "there are many ongoing projects by Daewoo in Ukraine. I'd rather have all things announced from the government side."

When Ukraine first began its tender of AvtoZAZ, General Motors was a prime candidate to participate in the joint venture that the Ukraine government sought for the carmaker. At one point GM was the sole candidate with official support to form the venture, but later, Ukrainian officials withdrew their support for a sole partnership with GM. GM continued as an interested party in the tender process, however, and is scheduled to complete a feasibility study concerning the possibility of jointly manufacturing cars with AvtoZAZ in the near future. The study was partially funded by the U.S. government.

Paul Dever -- The Auto Channel