Warsaw (Puls Biznesu) – The European Commission would like to cut production in FSO Warsaw plant to 150,000 cars annually. The company would like Daewoo lanos model to be excluded from the limit.
On Tuesday, the management of Ukrainian AwtoZAZ, the investor in FSO car plan with the representatives of the Ministry of Economy and the Ministry of the Treasure, held talks in Brussels with the European Commission (EC). The latter is wondering whether to allow for public subsidy for FSO.
“Generally, EC agrees to give the subsidy. But it has all the time one important condition: production should be limited to 150,000 cars annually till 2010. AwtoZAZ does not agree. We are going to offer a compromise: the production of lanos would not be included in the limits. Lanos is not the newest model and it won’t be any competition to European car producers. The plant would then produce 200,000 cars annually”, Pawel Poncyljusz, the deputy Minister of Economy said.
If EC does not like the solution, AwtoZAZ may decide that the Polish operations are not profitable.
The rights to produce lanos expires at the end of this year. The Ukrainian investor hopes it will be prolonged because the cars sell well, e.g. in Ukraine. FSO hopes to produce one of Chevrolet models but the license agreement with General Motors has not been signed yet. Public subsidies for FSO consist mainly in state guarantees for USD 100m credit necessary to launch production of the new model.