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ZAZ Slavuta Nova

Given the present situation of the auto industry in Ukraine, taking the project to production might be tough for ZAZ. Currently the ZAZ plant is idle, with only 4 cars (units) made in Jan-Apr. 2016 (cf. 3624 cars out of 3937 autos+CV made in CY 2015) as a result of the continuing economic hardships, as well as a pending switchover to Euro-5 standards for its current lineup.

The salient points of the Slavuta Nova project are:

Localization level > 50% in full-cycle production; Euro-6 compliant Acteco engines to be made locally at MeMZ.
Planned output ~ 30000-40000 units/PA ramping up to 50000
Expected SOP: 13-14 months from now (2nd half of 2017)
Focus on exports: main export market to be the EU and CIS.

The major hurdle of course is funds. Although UkrAvto/ZAZ is expecting their Chinese partners to help, borrowing at high interest rates for the investment in tooling, jigs and other equipment could jeopardize the project and make it unviable as they are expecting to price the car at around $10,000. Of note, this is a car that is not made in China, so simple import and assembly of kits to flag off production (at least for an initial period) is not an option here. Other near-term projects where funds are required and/or tied up are the upcoming Vida boxvan and Forza FL (facelift), the latter expected in early 2017.

It will be interesting to see how things progress.

Sources: (data)
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