Two months without zero customs clearance: what has changed? Prices and average age of cars
The temporary cancellation of customs payments renewed the active part of the car fleet and led to a decrease in the price of popular car models. More than two months have passed since the tax refund. The team of the Institute of Car Market Research analyzed the statistical data of the Automoto.ua aggregator , which collects announcements for the sale of ALL cars from 100 car websites in Ukraine. Based on more than 2.2 million unique ads for January-August 2022, experts have determined what has changed in the car market after the cancellation of zero customs clearance.
The number of budget cars has increased
As in June, the absolute majority of ads for the sale of used cars are cars priced up to $10,000. Compared to June, the share of such in August increased slightly: from 71.6% to 72.4% of the total number. The share of cars priced up to $3,000 increased especially noticeably: from 20.8% to 24.2%.
Thus, the number of especially low-cost cars on the market has increased. Thus, this indicator actually returned to the level of January 2022, when it was 24.4%. The change in the price structure is most likely a consequence of the cancellation of the so-called "zero" customs clearance, because the number of "freshly driven" cars on sale has decreased, experts of the Institute of Car Market Research suggest.
7 out of 10 popular cars have become cheaper
The lowest average price of a used car on the market was in April 2022 : $5,500. In May, this indicator increased to $5,990, and with small deviations remains almost unchanged. So, in August, the average passenger car in Ukraine cost $5,900. This is $100 or 1.6% less than in July.
Among the ten most popular models on the Ukrainian market in August, the price of only two models increased: the leader of the Volkswagen Passat rating (by 1.5%, from $6,800 to $6,900 ) and Renault Megane (by 3.2%, from $6,300 to $6,500 ). Both cars were popular in the segment of imported cars from abroad, especially during the period of the so-called zero customs clearance. After the tax refund, fewer of these cars enter the market, and therefore their average prices increase.
The average price of a Volkswagen Golf ($5,000) has not changed. The remaining 7 models from the top ten have become cheaper:
- Daewoo Lanos: −19%, from $2,600 to $2,550
- Skoda Octavia: −1.5%, from $6,700 to $6,600
- BMW 3 Series: −4.8%, from $6,300 to $6,000
- BMW 5 Series: −4.1%, from $7,400 to $7,100
- VAZ 2109/21099: -3.2%, from $1,550 to $1,500
- Ford Fiesta: -4.5%, from $6,300 to $6,020
It is worth noting that historically, prices for cars in Ukraine are set in US dollars. Considering that the majority of Ukrainians receive income in hryvnias, the exchange rate change of almost 25% reduced purchasing power by the same amount. This may also be one of the reasons for the gradual decrease in the price of cars on the market, the Institute of Car Market Research suggests.
The car market is aging
The youngest average age of passenger cars that Ukrainians offered for sale on the Internet was recorded in June and July: 15.2 years. This happened as a result of filling the Ukrainian car market with more "fresh" cars and its "rejuvenation" after the introduction of zero customs clearance.
According to the results of August, the average age of passenger cars increased slightly — up to 15.6 years. That is, after the restoration of taxes on car imports, the number of older cars on the market increased. The age structure has also changed: the number of cars manufactured over 1992 (that is, over 30 years old) has increased, their share has increased from 8.2% to 9.1%.
According to the forecast of the experts of the Institute of Car Market Research, this trend will continue, and the situation may return to the level of January 2022, when the average passenger car put up for sale on the Internet was 16.5 years old.
The share of Soviet-Russian cars has increased
When there was zero customs clearance, Ukrainians had the opportunity to buy a better car for the same money. The market share of Western brands grew, while the number of Soviet-Russian brands decreased. In August, everything changed:
- the share of the most popular Volkswagen decreased from 11.5% in June to 10.9% ;
- Mercedes-Benz — from 5.5% to 5.4% ;
- Ford — from 5.2% to 5% ;
- Opel — from 5% to 4.7% ;
- BMW — from 4.8% to 4.7% ;
- Audi — from 4.1% to 3.9% ;
- Toyota — from 3.9% to 3.7% ;
- Mazda — from 2.5% to 2.4%
- Citroen — from 1.3% to 1.2%.
Instead , there were more "VAZs": their share in the structure of ads was 7.2% to 8.3%. ZAZ cars also increased — from 1.5% to 1.8% of the total number. Thus, the process of replacing cars of these brands with Western ones has stopped. After the cancellation of zero customs clearance, not only the average age of cars on the market increases, but also the quality of the Ukrainian car fleet decreases.
Conclusion
The processes taking place in the car market of Ukraine today cannot be called positive, experts of the Institute of Car Market Research explain.
- The average age of cars has become longer, the number of cars over 30 years old on sale has increased. The active part of the fleet is aging.
- Three popular among imported used passenger cars increased in price, 7 of the top 10, on the other hand, decreased in price. However, this was rather the result of a decrease in purchasing power due to the economic crisis caused by the war and the change in the exchange rate.
- The market share of Soviet-Russian brands has increased. With the abolition of zero customs clearance, the possibility of replacing this part of the fleet with imported cars disappeared.
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