Three companies of the GAZ Group are sanctioned by Ukraine

In 2016, the products of one of its plants, PAZ, became the leader of the Ukrainian market.
Ukraine included OOO GAZ Group Management Company, OOO Russian Coaches - GAZ Group, and Pavlovsky Bus Plant LLC in the list of 468 companies against which special economic and other restrictions (sanctions) were applied. The relevant decree was published on May 16 on the website of Ukrainian President Petro Poroshenko. Among the measures of influence - temporary blocking of assets, restriction of trade operations, prohibition of participation in public procurement, suspension of fulfillment of economic and financial obligations, etc. Each participant of the list has a different validity period (as well as a set of restrictions), for GAZ Group companies they are introduced for three years.

The GAZ Group has no property in Ukraine, its representative said. To assess the possible impact of sanctions on the company's business, he did not.

In 2016, the Ukrainian market sharply - almost 11 times to 401 cars - increased sales of buses "PAZ", as a result, the brand with a share of 31% became the market leader, according to the data of the association "Ukrautoprom". Before that, they had been falling for three years (see chart). Local AIS group (official importer of GAZ cars in Ukraine) produces PAZ Mriya school buses on the basis of PAZs, which often win public procurement, Interfax reports. At the end of last year, the association "Ukrautoprom" filed a complaint with the Interdepartmental Commission for International Trade and initiated an anti-subsidy investigation into GAZ buses, the agency recalls. The export of buses from Russia to Ukraine in 2016 grew almost 4 times to 1120 units, with almost 1,000 units worth more than $ 20 million delivered by the PAZ, the CEO of Infoline analyst Mikhail Burmistrov said.

The loss or reduction of supplies to Ukraine will not be dramatic for the PA, according to Vladimir Bespalov, an analyst with VTB Capital. This country until 2014 was one of the largest foreign markets for the Russian car industry, but then demand in Ukraine fell sharply, he explains. According to Ukravtoprom, the bus market, for example, has narrowed 2.5 times since 2013 to 1293 units. In 2016. For comparison: in the last year PAZ issued about 8,200 buses, according to a person familiar with the company's managers. But the GAZ group, whose capacities are under-utilized (because the Russian market has also shrunk), it is important to develop exports, so the losses of the Ukrainian market will have to be compensated at the expense of other countries, Bespalov sums up.

In 2016, revenues from sales of GAZ Group's products in Russia amounted to 132.7 billion rubles, in the CIS - 11.4 billion rubles, in other countries - 6 billion rubles, the company said in a report. The structure of sales in foreign countries is not specified. In total, the products were shipped to 46 countries in 2016, the target for 2017 is to increase this number to 51, the representative of the company reported earlier.

Earlier under the Ukrainian sanctions another Russian motor-car manufacturer - "Kamaz" fell. He is also on the updated list - his trade operations in the country are limited to one year, the presidential decree says. On the company's activities this will not be reflected, comments the representative of "Kamaz". The company has not had business in Ukraine for several years, including supplies of spare parts and finished cars, he explains. However, according to him, brand technology is still in demand in the market, but how it is imported to Ukraine, "Kamaz" does not know. According to Ukravtoprom, in 2016 sales of new Kamaz trucks on the Ukrainian market almost doubled to 100 cars.