HN: Avia Ashok Leyland To Build Plant In Ukraine

PRAGUE, Czech Republic -- Czech lorry maker Avia Ashok Leyland plans to build a plant in Ukraine, the daily 'Hospodarske Noviny' (HN) wrote Tuesday referring to a well-informed source.


The plant construction is being prepared but no more details will be published for now, the source said, adding that a more detailed information could possibly raise the price of land at a potential construction site.

A location is yet to be picked and no decision has been made on the parameters of the facility, according to the source.

Avia head Anders Spare refused to comment on the company's plans, HN said.

In the autumn of 2006, when Ashok Leyland bought into Avia, the then head of Ashok indirectly announced that a plant could be built abroad, the paper writes.

Avia entered the market in Ukraine last year by means of the US company Procter&Gamble that ordered 60 vehicles for the distribution of its products on the local market. Avia supplied 30 lorries last year, HN said.

Avia sales soared 75 percent to 713 cars last year.

This year, the company wants to increase production to 2,000 units, Spare said.

Avia produces more than 55 combinations of models weighing from 6.5 to 11.990 tonnes. These vehicles do not pay toll that is collected from lorries weighing 12 tonnes and more, the paper said.

In March 2005, Odien Capital Partners took over Avia from the collapsing South Korean car maker Daewoo and sold it to Ashok Leyland Motors of India in 2006.

Avia has been in the red since 1999, its losses in recent years caused primarily by high write offs.

Avia's loss in 2006 rose by a third to Kc965m on sales worth Kc430m.

Sales doubled and loss went down last year, according to preliminary results.

Source: Prague Daily Monitor