Warsaw (Puls Biznesu) – Polish Ministry of Treasure is still waiting for Ukrainian AwtoZAZ to sign agreement to buy 20 percent in FSO, Warsaw car plant. Meanwhile, Ukrainian press reports that the future investor has financial difficulties. New duty and tax rules, including firmer VAT and excise duty collection, cuts in duty-free imports of car parts, etc. deteriorated the situation of the country’s motor industry. According to the chairmen of the board of directors in AwtoZAZ, the new VAT and excise duty rules caused price increase and sales decrease by 30 percent. New duty rates will cut sales by further 30 percent.
‘Maybe it’s not that bad and AwtoZAZ representatives want to influence the Ukrainian government, so they threat with bankruptcy. If they are true, its much worse, because it will lead FSO closer to bankruptcy’, one of Polish automotive experts commented. In 2004, AwtoZAZ and rival LAZ received PLN 390 m (EUR 93.2 m) of subsidies from the government. ‘We will closely check investor’s situation before we sign the agreement’, Janusz Kwiatkowski, the spokesman of the Polish Ministry of Treasure said. Jacek Piechota, the Minister of Economy is more optimistic. ‘The situation in Ukraine is indeed difficult for companies. But this is another reason for AwtoZAZ to shift production to a country with a stabile legal and tax system’, Jacek Piechota said.
Experts are more cautious. ‘The privileged position of AwtoZAZ is under threat. Moreover, Tariel Wasadze, its owner, was connected with the former president Leonid Kuchma’, Arkadiusz Sarna, Ukrainian expert in East Studies Centre said. ‘If those news turn out to be true, it may be impossible to sell FSO, which would be a pity’, Wojciech Drzewiecki, the CEO of Samar company monitoring car market in Poland commented. ‘Polish authorities have many times proved to be incompetent when looking for investor for FSO. Daewoo promised much but did not do much. Recently, FSO has nearly been sold to troubled Rover’, Andrzej Sadowski from Adam Smith think-tank pointed out.
(PLN 1 = EUR 0.239)