Contrary to myths: the average age of cars has decreased, and Volkswagen is replacing Lada

Since the beginning of the year, the Ukrainian car market, society in general and the economy in particular have been in the most stressful circumstances, probably in their entire history since independence. The biggest changes in the field of car sales took place at the beginning of the full-scale invasion of Russia, after the introduction of "zero" customs clearance, and later — after its cancellation.

Along with the prices , the share of brands and the average age of passenger cars sold by the country in 2022 also changed. The team of the Car Market Research Institute determined exactly what changes have taken place in the market since the beginning of the year, and how "zero" customs clearance has renewed the Ukrainian car fleet. The basis of the analysis was the statistical data of the aggregator Automoto.ua , which collects announcements for the sale of all vehicles from 100 auto sites in Ukraine.

The average age of passenger cars decreases with mileage

At the beginning of the year, the average age of the active part of the car market, that is, those cars sold by Ukrainians on the Internet, was 17.4 years. Before the beginning of the great war, it was kept within 16.5 years, but at the end of February it sharply increased to 19 years. Turbulence in the market could have led to this.

In March, a significant number of cars left the active part of the market, and activity on it moved to the western regions. Millions of Ukrainians used their own cars to evacuate from dangerous areas, and did not think about buying a new one. Some car owners tried to urgently sell the car in order to get "quick" money.

In March, the situation stabilized and the market returned to its usual parameters — the average age of passenger cars returned to 16.5 years. At the end of April, after the adoption of the so-called "zero" customs clearance, the average age of used cars increased to 17.3 years. Experts believe that this may be the result of a part of the "freshly driven" cars of the most affordable price category entering the market, as well as old cars, to replace which Ukrainians brought newer ones from abroad "under zero".

However, already in May, the average age began to decrease, and in the last week of June it reached a minimum: 14.7 years. In general, the average age of used cars decreased by 1.5 years: from 16.7 years in February to 15.2 in June. Contrary to popular myths, "zero" customs clearance did not make the offer on the Ukrainian car market obsolete, but "rejuvenated" it.

There are fewer old cars

Equally important is the comparison of the age structure of the offer on the market. Both in February and in April and June, most Ukrainians offer for sale cars manufactured in 2005...2008. In February, there were 26.3% of the total number of such ads. In April — already 26.7%, and in June — 28.4%. Instead, the share of old cars over 30 years old began to decrease: from 11.6% in February to 7.8% in June.

That is, with the filling of the Ukrainian car market with used cars from abroad, imported under "zero" customs clearance, the share of the oldest cars over 30 years old has decreased by almost a third, while the share of newer ones has increased.

Volkswagen and BMW replace Lada

According to experts of the Institute of Car Market Research, since the beginning of the year, the average price of used cars has decreased by almost 25%, or $1,000 in monetary terms. That is, Ukrainians got the opportunity to buy a better car for the same money. This is confirmed by other statistics: the share of Western brands on the market has increased and their average age has decreased, and most importantly, the number of Soviet-Russian "VAZs" has significantly decreased.

Thus, in June, Ukrainians offered 6% more Volkswagen cars for sale, and their average age decreased by 0.6 years. Instead, the share of products with the "VAZ" badge decreased from 13.2% to 9.3%. Products of this brand were sold in June by 28.5% less than in February.

Also, in June, the number of ads for the sale of BMW cars increased significantly: by 31%. In general, the average age of cars decreased by an average of one year for each of the 10 most popular brands of used cars in Ukraine.

Thus, a conditionally used 15-year-old Volkswagen from abroad replaces an old 30-year-old VAZ on the market, which is permanently decommissioned and sent for scrap metal, suggest the experts of the Institute of Car Market Research. That is, not only the age, but also the quality characteristics of the fleet are improving. In simple words, more high-quality machines appeared on the market.

Whatʼs next?

Since the purchasing power of Ukrainians is limited and continues to decrease as a result of the war, the majority of Ukrainians will continue to buy cars in the price range from $2,000 to $8,000. Ukrainians simply do not have enough money for more expensive cars. The only question is what kind of cars these will be.

Given the circumstances, it is possible to update the Ukrainian car fleet by replacing its oldest part with newer cars with mileage brought from abroad. However, as a result of the return of the 2018 customs payment calculation system, namely the excise tax formula, which is calculated in euros and depends on the technical characteristics of the car and its age, the import of most passenger cars with mileage has become economically impractical. This can lead to a shortage of cars in the most popular price category, which in turn will lead to a decrease in the average age on the car market and, accordingly, in the car fleet.

In order to prevent such negative consequences, it is necessary to carry out a comprehensive reform of the legislation, which will change the scope of import of used cars to Ukraine, will take into account the existing circumstances and modern realities. Such solutions include, for example, permanent abolition of excise duty on all vehicles, simplification of customs clearance procedures using " customs clearance in a smartphone " through the Diya application, reduction of the number of bureaucratic stages during importation, replacement of certification with the first and regular technical inspection, experts of the Institute of Car Market Research believe.

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