Nizhny Novgorod moves against Bogdan, UkrAvto plans in region

The Nizhny Novgorod Regional Administration published an order to seek to revoke the rights to Bogdan Automobile (LUAZ) and UkrAvto (AVTO) to build a plant in the region in courts. The move follows the failure of the two Ukrainian manufacturers to make progress on plans to build an automobile manufacturing plant on a 50 ha land plot in the region. Yegor Samusenko: We believe that with the 84% yoy drop in car output by Ukrainian manufacturers and the close to 50% drop in car production in Russia, the cancellation of this new investment project was a completely rational decision by Bogdan and UkrAvto. Since news about Bogdan plans to halt building of manufacturing plant in Nizhny Novgorod was known in July, we believe the market is not accounting for this project in valuation of either stocks, thus we do not foresee stock market implications from this news.