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Investments in diesel engine manufacture will enable the company to win a niche in which no domestic industry peers operate so far and this will positively impact the company’s sales and its market share.
The media reported on May 22 that GAZ plans to invest $1 bln in diesel engine manufacture in 2006-2011. At present, 15-20% of this amount has been used. The company plans to produce a full array of diesel engines which are to be installed both on Volga Chrysler-based cars and GAZelle half-ton trucks and Valday heavy trucks.
We are upbeat on the company’s decision, since it will make it possible to diversify and expand the product mix. Products powered by diesel engines will enjoy demand. First, their price is lower and second, diesel fuel costs less. In our opinion, this move is necessary in competition with foreign car makers. In addition, GAZ will win a niche in which no domestic industry peers operate so far and this will positively impact the company’s sales and its market share.
At present, we have no recommendation on GAZ shares.
Konstantin Romanov
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GAZ
Capitalization: $192 158 353,80
Common shares:
Price: $9,63
Delta week: 0,00%
Delta month: -27,4%
Delta year: -94,3%
Preferred shares:
Price: $9,50
Delta week: 0,00%
Delta month: -26,9%
Delta year: -92,0%
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0.244
0.616
