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Ukraine's largest car producer will bid for Romania's plant

UkrAvto, Ukraine's largest manufacturer and distributor of cars, including Toyota, Mercedez-Benz and Renault brands, will bid for Romania's second-biggest car factory to increase its production.

„We are very interested in the Romanian factory,” Olena Makhno, a UkrAvto spokeswoman, said yesterday in a phone interview in Kiev. „We would like to produce component objects for our cars there.” Romania's government bought back the majority 51%-stake in the plant Automobile Craiova SA from South Korea's Daewoo Motor Co. Ltd. in August last year.

Procedures to sell the plant will start in March. UkrAvto will probably compete with Ford Motor Co. and General Motors Corp., which are also interested in buying the factory. Ukraine, a country of 47 million people, expects its economy to have expanded 7% in 2006 and to advance 6.5% this year. The country's retail sales, spurred by higher wages, rose 25.1% in the first 11 months of 2006, compared with 22% a year earlier.

Zaporizkyi Avtomobilebudivnyi Zavod (ZAZ), which is owned by UkrAvto and builds models under its own brand as well as for DaimlerChrysler AG's Mercedes-Benz brand and GM's Daewoo affiliate, produced 193,114 cars last year, an increase of 30%, according to a statement on the factory's Web site. ZAZ wants to increase its production 43% this year, to 277,000 cars. ZAZ bought a 20% stake in Polish Fabryka Samochodow Osobowych SA, also a former unit of Daewoo, in 2005. (Bloomberg)