Volkov joins board of AvtoZAZ-Daewoo

Eastern Economist

ZAPORIZHIA - The AvtoZAZ-Daewoo JV shareholders' general meeting elected Oleksander Volkov, President Leonid Kuchma's advisor and the leader of Revival of the Regions faction in the Verkhovna Rada; and Leonid Kalchenko, the chairman of the State Property Fund, to the joint venture's board.

The shareholders also approved the distribution of profits for 2000. In 1999 AvtoZAZ-Daewoo finished in the red, with losses amounting to 46.5 million hrv.

The chair of the board, Tariel Vasadze, who was re-elected for another term, said the losses resulted from the idling of the plant's main assembly line in 1999. In the first quarter of 2000, there was a slight increase in production, with sales of cars increasing by 30 percent, compared with last year's first quarter. These results fall 50 percent short of the established targets, said Mr. Vasadze.

He added that the recent government decision to cancel the minimum customs value for imported cars and allow the import of up to eight-year-old used cars dealt a heavy blow to the JV. Mr. Vasadze stressed that as a result of this decision AvtoZAZ-Daewoo will have to reduce car production in 2000. Under the earlier plans, car production was to have reached 36,000 in 2000, with 38,000 cars to be sold.

In the first quarter of this year the JV made 1,030 Tavria and Slavuta models, while 1,200 Korean models were assembled in Illichivsk. Provided that the JV generates a profit in 2000, the shareholders voted to allocate 50 percent for dividends and 35 percent for development.

The State Property Fund has plans to sell over 31 percent of the shares in AvtoZAZ, the Ukrainian partner of Daewoo, to raise the money to develop domestic car-building. The state will retain a 50 percent plus 1 share stake in AvtoZAZ.

Copyright © The Ukrainian Weekly, April 30, 2000, No. 18, Vol. LXVIII

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