Bogdan Motors shows output recovery in June

Bogdan Motors (LUAZ UK) produced 3,042 vehicles in 1H13, which is 2.7x less yoy, according to UkrAutorom statistics. The company produced 2,742 passenger cars (-64% yoy), 79 commercial cars and trucks (-83% yoy) and 221 buses (+5% yoy), according to the source. Cars produced in May and June 2013 accounted for 60% of Bogdan’s first-half output, and June showed significant progress in terms of output: 1,146 vehicles (+50% yoy, +68% m/m), including 1,072 passenger cars (+67% yoy, +70% m/m).

Roman Dmytrenko: In May, the company revealed its target to produce 15,000 light vehicles this year (+25% yoy) and June statistics suggest this plan has real merit. So far, however, we remain conservative on Bogdan and see the production of 12,000 cars (flat yoy) as an excellent result for the company in 2013.

The period of recovery in Bogdan’s output coincided with introduction of an additional duty on the import of light cars to Ukraine. At the moment, the Ukrainian government is under big pressure from its trading partners that oppose the new import barrier. There is a high risk that it will be removed or somehow softened in the near future. Theoretically, this can undermine Bogdan’s further output growth.