Bogdan Motors ups car export to Russia 1.6x yoy in 5M12

Bogdan Motors (LUAZ UK) increased export sales to Russia by 60% yoy to 6,500 cars in 5M12, a company representative announced yesterday. He also said the company is targeting 2x yoy growth in exports to Russia via the development of its local dealer network.

Roman Dmytrenko: According to company data, Bogdan cut its passenger cars output 6.4% yoy to 6,898 units in 5M12. This implies the company increased share car of sales to Russian market 39 pp yoy to 94% in 5M12. In our view, the development of its dealers network in Russia, which is 10x bigger in terms of volume than the Ukrainian auto market and historically has had superior growth might become a key factor in allowing the company’s production to reach the breakeven point this year. We also note that Bogdan’s non-Russian (i.e. mostly domestic) car sales fell almost 10x yoy in 5M12. These statistics might improve after the adoption of an additional import duty in Ukraine on the most popular foreign mid-class cars, which was pre-announced yesterday by the Ministry of Economy.