At its regular meeting in Moscow Board of Directors of «KAMAZ» Inc. has adopted the Company’s business plan for the year 2004.

Representatives of the Company’s shareholders started their meeting from consideration of the Company’s business plan execution during 9 months of 2003, and then they evaluated prospects of its fulfillment till the end of the year. Production output and sales volumes this year will exceed those of 2002 by 15–20% for various operation activities, and by 2,5% for «OKA» passenger car. Business plan on profit gain will be exceeded by 105,6 % in 2003 vs.2002 and will grow up to 26,9 bln. Rubles. Net profit of the Company this year will make 92 mln. Rubles.

Board of Directors has set a task to ensure a 15% increase of the Company’s capitalization, which should be not less than USD 350 mln. by the end of 2004; to reach a 6,1% min. profitability from the main activity; and to get not less than 104,5 mln. rubles of net profit.

These basic figures will be reached if annual output and sales volumes equal to 30 bln. Rubles (i.e. by 23% more than it was expected in 2003 — in current prices), this includes 26 400 trucks and 40 000 passenger cars (by 10% and 1,25% more), their spare parts to 5,4 bln. Rubles worth (15% growth), and products of diversification to 3,5 bln. Rubles min. (growth by 18% — also in current prices).

At the same time, sales efficiency growth rate of both trucks and cars should significantly outpace increase of production volumes while average production costs will be reduced as an average by 5–7% as compared with the basic cost estimations. Production volumes of new trucks and also of those trucks, buses and chassis that have a stable market demand and that are more profitable from the point of view of their operation and maintenance, will reach 50% from the total output. It is planned to distribute 21,400 KAMAZ trucks and 39,350 OKA passenger cars on the domestic market in 2004. Thus, «KAMAZ» Inc.’s share at the Russian market of heavy-duty trucks will grow from the current annual average rate of 36,3% up to 38,5%.

The Company has an interesting export program. More than 5,000 KAMAZ trucks will be exported. Share of sales volumes to overseas and to CIS countries will be almost equal (2,570 and 2, 440 units accordingly). It is planned to strengthen KAMAZ Inc.’s positions both on the prevailing markets (Kazakhstan, Ukraine, Vietnam, Afghanistan, etc.) and on traditional and new markets of Eastern Europe (Hungary, Poland, Bulgaria, Serbia, Montenegro), Asia (China), Western and Northern Africa (Niger, Senegal, Egypt, Sudan, Tunis). This plan can be materialized through efficient development of the Company’s service and distribution network; significant improvement of its products quality; increased delivery of a family of heavy-duty trucks (including trucks powered with «RABA» and «Cummins» engines); establishment of new assembly plants from CKD kits; and by promotion of middle carrying capacity trucks. KAMAZ Inc. has entered the perspective Middle East market (UAE, Syria, Bahrain) and the market of countries with the left side traffic (India, Pakistan, and Indonesia), thus ensuring fulfillment of its strategic export expansion plans.

In 2004 there will be exported not less than 650 units of OKA passenger car (growth by 1,5 times). 1,400 KAMAZ trucks and 100 NefAZ buses will be offered to customers on lease. Production of coaches will increase almost by 1,5 times as compared with 2003. There will be assembled 900 buses and 120 of those coaches and bus chassis which will be exported.

In the structure of goods production trucks will dominate — 61% from the total output. Share of passenger cars will be 9%, spare parts — 18%, and products of diversification — 12%.

The main targets the Company in 2004 are as follows: to ensure execution of the business-plan and to hit its basic financial and economic indicators and production figures; to further expand the model range of vehicles to satisfy market needs; and to improve commercial properties and quality of assembled trucks. There will be elaborated a number of new design concepts to expand the model range of trucks and their chassis followed by future finishing and certification activities. The Company will significantly increase the output of engines that will have improved reliability, quality and be environmentally friendly. The share of such engines will grow sharp. «KAMAZ» will proceed to further develop new models of gas engines, to launch them into production, and to power series and pilot lots of new trucks and buses with them.

This is going to be the year of active sales promotion of trucks with increased carrying capacity and especially of heavy-duty class trucks. As compared with 2003, in 2004 there will be a three times growth in output of a heavy-duty trucks’ family and chassis for mounting diversified superstructures. They have been designed on the basis of a KAMAZ-6520 dump truck (-6522, -65225, -65226), KAMAZ-5460 and KAMAZ-6460 haulage prime mover truck tractors, and a range of trucks based on KAMAZ-6540 four axial chassis, etc. Next year there will be launched into production a pilot batch of city delivery trucks. It is planned to increase their output smoothly and to put the family of these trucks into mass production. In November 2003, the Company launched the production of a medium-duty KAMAZ-4308 truck of 5.5t carrying capacity. It is scheduled to market not less than 433 units of this truck within 2004.

KAMAZ-65116 prime mover truck tractor with a 15t load capacity on the fifth-wheel device, and KAMAZ-65117 side-truck tractor of a 14t carrying capacity (gross weight of each road train is 37t) will be launched into mass production too. Among trucks of increased carrying capacity these vehicles will fill in the top carrying capacity niche.

As a basis of the business-plan there have been applied various concepts and approaches, and after all there has been chosen «the golden mean» ensuring the best financial and economic results.