UkrAVTO President Tariel Vasadze told Prime Minister Yulia Tymoshenko last Friday that the carmaker was being forced to make the move after demand plummeted amid the ongoing global financial crisis, the Kommersant-Ukraine newspaper said.
"We will maintain our production targets for this year as the situation is not that critical," said Mykola Yevdokymenko, board chairman at the Zaporizhia automobile building plant (ZAZ).
However, he warned that production could fall in 2009.
The Ukrainian car maker produced 22,740 cars in September, down from 24,690 in September 2007. The company produces several domestic brands, as well as the Îpel, Chery, Chevrolet and Lanos models.
UkrAVTO plans to make up for lower output by increasing exports. The company announced on Friday it had signed contracts to export around 40,000 Lanos cars to Russia, and 14,000 vehicle sets for a General Motors plant in Egypt.
"We should switch to markets still untouched by the recession," the paper quoted Oleh Papashev, UkrAVTO's vice president, as saying.
The global financial crisis has hit Ukraine hard, with most banks facing bankruptcy, rising unemployment and the construction industry virtually grinding to a halt. The government has drafted a package of anti-crisis measures aimed at stabilizing the country's financial systems.
Market players said Ukraine's car sales could drop 10-20% year-on-year in 2009 due to the financial crisis.
Ukraine reached an agreement with the IMF on Sunday over terms for a $16.5 billion loan to Kiev to help stabilize the economy and restore confidence.
