Ukraine
Ukraine, with a population of more than 40 million, used to be one of the largest automotive markets in Central and Eastern Europe. However, since 2008, the global financial crisis and conflict with Russia have taken a toll on the economy and the car market. In 2020, only 85,500 new passenger cars were registered in Ukraine, which is 3% less than in 2019, according to the Ukrainian Motor Vehicle Manufacturers Association (Ukrautoprom). Today Ukraine is one of the smallest European car markets, with annual sales below those of Slovakia. It is especially remarkable considering Ukraine's large population. Poland, which has a population of comparable size, has annual car sales that are 5.5 times larger than those of Ukraine. Ukraine's car penetration, at 185 per 1,000 people in 2020, is well below that of Poland (530 per 1,000), and much lower than in its other Eastern European neighbors, Hungary and Slovakia. Ukrainians prefer imported used cars to new cars (the ratio is approximately 4:1). In 2020, the most popular imported used cars were Volkswagen Passat, Renault Megane, Skoda Octavia, Volkswagen Golf, and Ford Focus.
Ukraine's car market is small, turbulent and fragmented, and market shares are volatile. Previously, the market was dominated by Russian and Ukrainian brands, but domestic production has collapsed because of fighting in the east, while the Ukrainian government has worked to sever economic ties with Russia. In early 2020, Ukraine's domestic motor-vehicle industry shows little sign of a sustained rebound. The country produced 423,127 vehicles at a peak in 2008, but this figure has plunged by over 95%. Any recovery in demand is likely to benefit imports more than domestic manufacturing. Still Ukraine has a strong industrial base, an inexpensive, skilled workforce and a large, underserved market that could remain attractive for investors.
In the era of digitalization and Industry 4.0, Ukraine is growing a reputation as an important center of innovation and Research & Development, with a number of its renowned IT companies serving the leading global OEMs and Tier 1 suppliers. Today new investment opportunities are being explored, such as electric vehicles and batteries, with Ukraine possessing the world’s largest reserves in lithium.
Summary
Buying and importing a car from the United States is quickly becoming a popular option for buyers in Ukraine. U.S. companies interested in expanding to the Ukrainian market should identify a local partner for effective marketing and sales distribution. This can be done via an established distributor with complementary product lines or a joint venture partner for joint distribution. In any case, due diligence on a potential local partner is highly recommended.
Market Entry
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Ukraine
Ukraine, with a population of more than 40 million, used to be one of the largest automotive markets in Central and Eastern Europe. However, since 2008, the global financial crisis and conflict with Russia have taken a toll on the economy and the car market. In 2020, only 85,500 new passenger cars were registered in Ukraine, which is 3% less than in 2019, according to the Ukrainian Motor Vehicle Manufacturers Association (Ukrautoprom). Today Ukraine is one of the smallest European car markets, with annual sales below those of Slovakia. It is especially remarkable considering Ukraine's large population. Poland, which has a population of comparable size, has annual car sales that are 5.5 times larger than those of Ukraine. Ukraine's car penetration, at 185 per 1,000 people in 2020, is well below that of Poland (530 per 1,000), and much lower than in its other Eastern European neighbors, Hungary and Slovakia. Ukrainians prefer imported used cars to new cars (the ratio is approximately 4:1). In 2020, the most popular imported used cars were Volkswagen Passat, Renault Megane, Skoda Octavia, Volkswagen Golf, and Ford Focus.
Ukraine's car market is small, turbulent and fragmented, and market shares are volatile. Previously, the market was dominated by Russian and Ukrainian brands, but domestic production has collapsed because of fighting in the east, while the Ukrainian government has worked to sever economic ties with Russia. In early 2020, Ukraine's domestic motor-vehicle industry shows little sign of a sustained rebound. The country produced 423,127 vehicles at a peak in 2008, but this figure has plunged by over 95%. Any recovery in demand is likely to benefit imports more than domestic manufacturing. Still Ukraine has a strong industrial base, an inexpensive, skilled workforce and a large, underserved market that could remain attractive for investors.
In the era of digitalization and Industry 4.0, Ukraine is growing a reputation as an important center of innovation and Research & Development, with a number of its renowned IT companies serving the leading global OEMs and Tier 1 suppliers. Today new investment opportunities are being explored, such as electric vehicles and batteries, with Ukraine possessing the world’s largest reserves in lithium.
Summary
Buying and importing a car from the United States is quickly becoming a popular option for buyers in Ukraine. U.S. companies interested in expanding to the Ukrainian market should identify a local partner for effective marketing and sales distribution. This can be done via an established distributor with complementary product lines or a joint venture partner for joint distribution. In any case, due diligence on a potential local partner is highly recommended.
Market Entry
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