ZAZ to Build Automobile Factory

Ukraine’s leading car producer, ZAZ intends to build a USD 1 bln automobile factory by 2015, according to Ukrainian News. Construction will take place in three stages: During the first and the second stages, new production facilities will be built with annual capacities of 120 ths automobiles each in 2011 and 2013. During the third stage, ZAZ will construct a plant producing 15 ths buses and trucks per annum in 2015. Inna Perepelytsya: ZAZ and UkrAvto (AVTO: N/R) share the same owner, Tariel Vasadze, but are separate legal entities. We expect that UkrAvto might see limited benefits from the construction plans as a dealer. According to management, only part of the group’s sales are currently reflected on UkrAvto’s balance sheet: UkrAvto controls less than 10% of all Vasadze’s automobile retail business.