Poland's FSO carmaker does booming business in Ukraine

Warsaw- Poland's once-troubled FSO carmaker is now in the pink thanks to booming exports of its Daewoo Lanos model to neighbouring Ukraine, Poland's Gazeta Wyborcza daily reported Thursday. Thanks to a 2002 deal with Ukraine's AvtoZAZ automotive giant, the FSO plant has bounced back from the verge of collapse after the bankruptcy five years ago of key investor, South Korea's Daewoo Motor.

FSO's Daewoo Lanos has become the top-selling model in Ukraine, taking nearly 35 per cent of the new car market.

The Warsaw-based plant's production has sky-rocketed. While 47,000 cars rolled off the assembly line in 2005, there were plans for up to 95,000 vehicles this year.

US auto giant General Motors is reported to be in talks with AvtoZaZ aimed at using the FSO plant to produce Chevrolet brand cars for export to Ukraine.

But it is up to the European Commission to rule whether the Polish government can inject subsidies to the partially state-owned FSO factory which would allow production to go ahead.

Poland was the largest of 10 mostly ex-communist states to have joined the European Union in May 2004. Non-EU Ukraine absorbed 3 per cent of Poland's total exports in 2005, according to Poland's Central Statistical Office (GUS).
Source:rawstory.com