First 'Ukraine-made' Mercedes-Benzes sold

[Jay!]

I'm surprised Igor hasn't already posted this:

from Kyiv Post; By Roman Olearchyk; 01 Aug 2002

First 'Ukraine-made' Mercedes-Benzes sold
Just four months after announcing its plans to assemble Mercedes‑Benz automobiles in Ukraine, representatives of Avtokapital, the Ukrainian company behind the project, say the first cars have rolled off the assembly lines of the AvtoZAZ‑Daewoo joint venture and have been sold.

Ihor Yemchuk, director of Avtokapital’s sales department for light and heavy automobiles, said more than a dozen Mercedes have already been assembled at a plant owned by Zaporizhia‑based AvtoZAZ‑Daewoo in Ilichevsk, Odessa oblast.

“We have already sold 12 Mercedes that were assembled in Ukraine – 10 E‑class [sedans] and two M‑class light sports utility vehicles,” Yemchuk said. “An additional 17 have been ordered by customers and are being assembled.”

Avtokapital is Daimler Chrysler’s exclusive representative for Mercedes automobiles in Ukraine. It is part of the Ukravto holding, which operates several Mercedes dealerships in Ukraine, including Kyiv’s Auto House Ukraine, Odessa Auto and Donetsk Auto. Earlier this year, the group purchased a controlling stake in Zaporizhya‑based carmaker AvtoZAZ in a privatization tender, giving it a 51 percent stake in the AvtoZAZ‑Daewoo joint venture. Also this year, the group helped broker the agreement between AvtoZAZ‑Daewoo and Daimler Chrysler that cleared the way for the assembly of Mercedes E‑class and M‑class cars in Ukraine.

The Ukravto group and Daimler Chrysler negotiated the deal for almost a year before announcing the decision to assemble the cars during a presidential visit to Zaporizhya on March 21.

“We plan to assemble up to 20 cars in August, for a total of about 200 by the end of the year,” Yemchuk said.

Yemchuk said each of Ukraine’s six authorized Mercedes dealers, including Dnipropetrovsk’s Viktor & Sons, Zaporizhya’s Alfa Plus and Kharkiv’s Solli Plus (none of which are part of the Ukravto group), have sold at least one Ukrainian‑built Mercedes.

Under the agreement, the Ilichevsk AvtoZAZ‑Daewoo plant receives the automobile bodies from Mercedes‑Benz’s factory in Stuttgart, Germany. Yemchuk said the engine and internal compartment parts like seats and windows are already installed, leaving components like the wheels, suspension and heating systems to be added in Ukraine.

Assembling large components in Ukraine allows the automaker to circumvent the 30 percent import duties that apply to finished vehicles. As a result, dealers can discount Ukrainian‑made models by about 10 percent.

An M‑class Mercedes costs between 43,000 euros and 79,000 euros, depending upon accessories and other details. E‑class sedans are priced between 38,000 euros and 104,000 euros.

Yemchuk said the demand for E‑class Mercedes in Ukraine greatly exceeds the number of cars that can be assembled domestically. Demand for the E‑class cars is so great, in fact, that even the more expensive German‑built cars are hard to obtain, he added.

“The new E‑class car is in demand not only in Ukraine but in all of Europe,” he said.

Natalia Kolesnyk, deputy director of Auto Consulting, a Kyiv‑based automobile market and industry consulting group, said the project should succeed due to the discounted price and growing demand.

“This 10 percent discount is a big achievement for such an assembly project,” Kolesnyk said. “Consumers will benefit from this.”

Kolesnyk said sales of Mercedes light automobiles in Ukraine have grown steadily in recent years, from 945 vehicles in 2000 to 1,313 in 2001. Sales for the first six months of this year were 661, on par with last year’s figures.

The AvtoZAZ‑Daewoo joint venture was formed in 1998 by the AvtoZAZ auto plant and South Korea’s Daewoo. It has since produced the compact AvtoZAZ Tavria and Daewoo Lanos, Nubiras and Leganza models using imported kits.

Daewoo representatives have denied reports that they intend to exit the joint venture following smaller‑than‑expected sales of their cars in Ukraine.

South Korea’s Daewoo Motors is now a division of U.S. automaker General Motors.