Samara Region Update

Automotive and Airspace

Auto VAZ Board to address dividends March 31

Directors at Russia's biggest car producer Auto VAZ will make their dividend recommendations for 2003 at a March 31 meeting, Vladimir Kadannikov, the board chairman, told reporters. Kadannikov said he did not think the dividends would be lower than for 2002. Common share dividends might be about the same, and just over 10% of net profits might be put aside for preferred share dividends.

Source: www.interfax.ru

Auto VAZ to issue $100mln in CLN

Auto VAZ, a major Russian car manufacturer, plans to issue $100 million in credit linked notes (CLN) no later than September 2004, Auto VAZ Vice President Mikhail Moskalev said at an Adam Smith Institute conference. Auto VAZ has several projects to prepare for its entry to international stock markets, including the CLN issue as a first step to issuing Eurobonds. It also plans to sell shares to a portfolio investor and increase its GDR package. Major investment projects, such as setting up production of new models, exceed the capabilities of the Russian financial system and financial resources on the Russian stock market are rather expensive. Thus, Auto VAZ has established a plan of action for entering international financial markets. Auto VAZ GDRs were last year listed on the Frankfurt Stock Exchange and now the company hopes for a listing in London. Auto VAZ Board Chairman Vladimir Kadannikov said the Federal Securities Commission had asked the company to review an article in its charter about preferred shares. The commission also notified Auto VAZ that it was supporting Viktor Tsobenko's case. Tsobenko is against a decision canceling a regulation where dividends on preferred shares account for 10% of net profit. Auto VAZ is preparing its response for the commission.

Source: www.interfax.ru 

 Russian Niva cars back in South America

 The first assembled Russian Niva cars have rolled off the conveyer of the Uruguayan factory Bognor, director Pedro Darrak said to RIA Novosti. "On the South American market the Russian off-road car will be sold as Diva," he said.

Divas will come out in three modifications - with carburetor and diesel engines, as well as the mass-produced armored cars featuring German and Swedish technologies.

Darrak said that his works "will be the first and only South American mass producer of armored cars, demand for which is high in Colombia, Brazil and Argentina." This year about 1,000 cars of Russian make will be produced and in three years to come the volume of assembly will reach 5,000 cars a year.

In turn, Russian ambassador to Uruguay Yan Burliai told RIA Novosti that "Russian, Uruguayan and French specialists have been working on the design of assembly in Uruguay. It is a good example of joint work in such a high-tech sphere as automobile manufacture." "There are good possibilities and prospects for such interaction in Uruguay," the Russian diplomat believes.

The manufacture of Russian cars in that South American country will make it possible to export them duty free to countries of MERCOSUR. Besides Uruguay, Argentina, Brazil, Paraguay, and Bolivia make part of this organization. Peru and Chile are its associated members.

To popularize Divas the first assembled cars set out on the over 10,000-kilometer-long Montevideo-Salvador-Rio de Janeiro rally. Mass manufacture of Diva cars will begin in May 2004.

Source: www.rianovosti.ru

Auto VAZ seized production of the 9th model

The enterprise has finally seized assemblage of its 9th model having been in production since 1987. Within the passed 17 years almost 1,5mln autos were assembled. The model was assembled not only in RF but in Finland as well – Valmet factory produced about 14,000 cars.

Source: www.AutoBan.ru  

 Auto VAZ plans to modernize its main conveyor

 Auto VAZ, JSC plans to upgrade its main conveyor, in particular the management system on the 3d stage assembling the 10th model cars. It is planned to purchase some gear abroad. In Jan - Feb of 2004 the enterprise has increased output by 44%. All in all, in 2004 it is planned to assemble 684,800 cars, while 699,889 machines were produced last year.

Source: www.rbc.ru 

 VAZ 10th models will be assembled in Egypt

Lada Egypt and Auto VAZ signed up an agreement dealing with the mentioned project start. It touches upon LADA 110 model. The assemblage will be run upon the whole producing cycle. The most of parts and spares will come from VAZ while the Egyptian side will deliver others. They plan to build about 240 cars by the end of the current year.

Source: www.lenta.ru

 Auto VAZ Must Pay Out

 The Federal Securities Commission said it had ordered Lada-maker Auto VAZ to restore a mandatory guarantee that 10 percent of net profits go to holders of preferred shares in dividends.

But the move, which follows a legal campaign by minority shareholders, is unlikely to affect payments in the near term as the firm has already promised 2003 preferred share dividends of at least 10 percent of net profits.

"We received a complaint from shareholders and … determined that Auto VAZ had breached the rights of the holders of preferred shares in that its articles of association did not correspond with legal requirements," a commission spokeswoman said.

The shareholders, who included Swedish Investment Fund HQ Fonder Sverige AB, won their challenge in late 2002, but complained to the commission in November that Auto VAZ had taken no action to reintroduce the dividend norm.

Source: www.themoscowtimes.com

 VAZ new models is tested  

 VAZ specialists have already started testing the new model LADA-2170. However its launch is planned for 2005. 6 running prototypes have been assembled for the tests and 12 more will be produced by the end of this year. In summer 2003 - on Moscow saloon the preliminary show of the model was carried out based on 2110 platform. However, the machine differs essentially from the most of 10th family models. The changes concern both the outward and inwards aspects. As the authors note nowadays the body will suit all Russian and European standards of passive safety and the novelty will also be equipped with various additional technical details and gear.

Source: www.lenta.ru 

 GM-Auto VAZ can't still reach the planned performances level

 GM – Auto VAZ, JV assembled 25,000 cars of 35,000 last year. The current year plan will be reduced by 5,000 more, mentions the general director. The analytic specialists think that extremely high prices for the production have caused such a reduction and low results. By the way the Company started in 2002 produces nowadays Chevrolet Niva and prepares to assemble Chevrolet Viva on the base of Opel Astra model. However the stockholders aren't anxious about the situation and seem satisfied with the sales and all the results as well as with the development strategy. They even point some certain rise of the production. The fact that the authorities announce such small but cautious plan can only be welcomed. Basically they say that the plan re-arrangements and corrections run now have been caused with some certain marketing calculation's mistakes. Finally they note that the price is dictated with the market requirements and demands.

Source: www.vedomosti.ru