Bogdan Motors car output halves yoy in 8M13

Bogdan Motors (LUAZ UK) total vehicle production fell 50% yoy to 5,421 units in 8M13, the company reported on September 9 in a press release. Car production fell 49.7% yoy to 4,864 units in 8M13, commercial vehicle output slumped 3.6x yoy to 186 units and bus production fell 5.4% yoy to 371 units for the period. Bogdan produced 1,192 vehicles in August, flat m/m. The company also said it would downgrade its 15,000 vehicle production plan for 2013. At the same time, it is in the process of negotiations with Chinese Lifan and Great Wall to start assembling their cars in Ukraine.

Roman Dmytrenko: Bogdan continues to underperform both the Ukrainian and Russian car markets where demand for cars declined 4% yoy and 7% yoy in 8M13, respectively. That confirms the company’s current production portfolio remains uncompetitive. However, we believe Bogdan’s recent steps to enter the booming segment of budget cars by offering Chinese models will pay off and enable it to swing back to profit in 2014.