Bogdan Motors to distribute and produce Chinese JAC cars

Bogdan Motors to distribute and produce Chinese JAC cars



23 серпня 2013 года
Конкорд Капитал

Богдан Моторс (LUAZ)


Bogdan Motors (LUAZ UK), among Ukraine’s leading car producers and retailers, announced on August 22 it completed the certification of five models of Chinese JAC passenger cars and will start selling them in September. The model line will target the most budget segments of the car market, with the cheapest car of the class A model to be priced at UAH 70K (USD 8.6K) and the price for most expensive compact crossover starting from UAH 154K (USD 19K). The company also is going to assemble locally two models, J5 and S5.



Alexander Paraschiy: This news is clearly encouraging for Bogdan, which decreased its production of passenger cars 2.2x yoy in 7M13. Its outdated product line, consisting mostly of old models of Russian Ladas, is clearly losing demand both in Ukraine and Russia as it becomes non-competitive by price and quality parameters.



In particular, the sales of Lada in Ukraine decreased 38% yoy in 1H13, which is much worse than the decline in aggregate car sales in the country (-5% yoy). At the same time, those who offered cars in the most budget segment (USD 8-12K) showed strong growth numbers on the Ukrainian market in 1H13: Geely (up 66% yoy to become a top 4 model by sales), BYD (+296%), Ssang Yong (+20% yoy), Peugeot & Citroen (+31%).



With the JAC product line clearly targeting this low-price segment, Bogdan should have success on this market, which raises the likelihood that the Ukrainian producer will increase its car output in 2014 and boost the load of its production facilities, which are currently being utilized at less than 10%.

Источник: Конкорд Капитал

Аналитик: Александр Паращий
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