VIENNA â€“ ZAT Evrokar, the Ukrainian assembler of Skoda Auto a.s. cars, plans to launch complete-knocked-down assembly of Octavias in early 2011 at its plant in Solomonovo.
â€śNeither in 2009, the crisis year, nor this year have we desisted in setting up the CKD assembly,â€ť Oleg Boyarin, supervisory board chairman of Evrokar and management board chairman of ZAT Atoll Holding, the company which controls Evrokar, tells Wardâ€™s.
â€śLast year, we installed the body-shop facilities, and the paint shop will be following this year,â€ť he adds. â€śWe are planning to complete installation of the equipment by the end of the year.â€ť
Original plans called for the launch of CKD assembly in 2009.
â€śWhile CKD assembly was originally planned for the Skoda Octavia A4, we are now in preparations for the Octavia A5,â€ť Boyarin says.
New-car sales saw a drastic decline in Ukraine last year, to 162,291 units, a 74% drop from 2008.
While Evrokar assembled 35,892 cars in 2008, only 3,564 were built at the Solomonovo plant last year.
â€śWe are planning to assemble about 9,000 units in 2010 as a whole,â€ť Boyarin says. â€śThe worst-case scenario would be if sales remained at last year's levels. However, we are tending to expect a 10% to 15% increase, particularly as potential demand exists on the market.â€ť
Following the election of Viktor Yanukovych as Ukraineâ€™s new president earlier this year, Boyarin expects the countryâ€™s economic situation to improve.
â€śI think the Ukrainian car market will be back at its 2008 level in four to five years' time,â€ť he says.
Currently, Evrokar assembles several Skoda models from semi-knocked-down kits. The company previously built SEAT SA andAG vehicles.
Assembly of VW cars was suspended in 2008, as former Ukraine President Viktor Yushchenko reduced incentives for local vehicle manufacturers. But with the countryâ€™s accession to the World Trade Organization, import duties for vehicles were lowered and local assembly no longer made sense for.
But Oleg Boyarin anticipates the government again will enact protective measures for the domestic auto industry, making assembly of other VW Group brands an attractive proposition.
â€śThere is a need to support local manufacturers and create conditions that ensure that they are not put at a disadvantage in comparison to importers,â€ť he says. â€śWe reckon that in the coming half year, all steps will be taken to protect our industrial base, including the automobile industry.â€ť