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Ukrainian Automotive Market: Passenger Cars, Components and Spare Parts 2007/2008 - 2010
Globis GmbH, Sep 2008, Pages: 87
Ukraine is, with a population of 46 million, one of the largest markets in Central and Eastern Europe (CEE). In the last years, Ukraine has experienced a substantial economic growth. With a nominal GDP of 140,3 bn. USD and growth rates of estimated 7% at constant prices in the next years, Ukraine is above average among the CEE states.
Ukraine’s car penetration is still much lower than in Western European markets, but higher than in other CEE countries like Romania or Bulgaria. In terms of car parc, Ukraine is in a mid-range position among CEE states with about 5,6 mio. cars in parc in 2006. Until 2006 the car parc has experienced only slow growth with a CAGR of 2,38% between 2002 and 2006, as imports of used cars declined through government regulations. As recently as 2006 the average growth rate of the car parc significantly increased and has reached slightly over 6 mio. cars by the end of 2007. We expect this trend to continue and consider the car parc to grow with a CAGR of 10,8% until 2010. Although new car sales make up a major part of the annual additions to the car parc, the majority of cars are still older than 10 years. The major risk is the current economic situation, which could affect the Ukraine substantially and jeopardize economic growth overall.
The import of used cars has declined very strong due to government regulations since 2002. With WTO accession Ukraine has to move away from the policy of import embargos of too old cars. Nevertheless, government still prevents the import of used cars by now charging high registration fees for imported cars.
On the contrary, the new car market experiences substantial growth with an expected CAGR of 23% from 2007 to 2010, supported by the expanded possibilities of car financing. In line with this development, the Ukrainian new car market is together with Russia and Poland the largest new car market in all CIS and CEE countries.
More than 50% of new cars sold in 2007, were domestically produced. These cars are not only Ukrainian brands, but also foreign brands manufactured through contractual arrangements. In 2007, 387.762 passenger cars were produced in Ukraine. With opening of the market due to WTO accession, Ukrainian manufacturers loose their competitive advantages and importers of foreign cars are expected to increase their share of new cars sold. Nevertheless, Ukraine has positioned itself as a production base for automobiles. Although there are domestic brands like ZAZ, the major part of the car production derives from contractual arrangements with foreign car makers.
The aftermarket currently has a size of 0,97 bn. EUR and is expected to increase to 2,06 bn. EUR in 2010. The aftermarket is one of the most attractive sectors in Ukrainian automotive industry over the next years. With further additions to the parc and with more and more demanding customers, better and more frequent service parts are needed.
The distribution system for spare parts is dominated by independent service chains and spare part shops. Official service chains do not play a major role.
In total, the Ukrainian market for passenger car vehicles and the Ukrainian aftermarket are very attractive markets. For companies, aiming to enter the market, convenient financing options and an aggressive sales network with good coverage are a must.
To prepare this market report, we used primary and secondary research methods: expert interviews and consumer surveys – in particular for the market of automotive parts, which is not covered yet by any substantial statistical data – and standard analysis of secondary information available on the topic. Based on our experience and developed competencies we have built proprietary market models to forecast future market development. The report was compiled in the period from March 2008 to September 2008 and hence includes statistical data until December 2007, if available.
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