What will happen to car imports? Market trends and indicators
Imports of used cars to Ukraine have increased 45 times over the past 7 years. The Institute of Car Market Research has processed an array of data from the State Customs Service on the import of cars in Ukraine, compared the indicators of the first quarter of 2021 with last year, and identified the main trends. Here are the main points of discussion of these trends with experts in the automotive market, which took place on Thursday, April 29.
HOW MANY CARS ARE IMPORTED FROM ABROAD
During the 1st quarter of 2021, more than 125,000 cars were imported to Ukraine. In total, Ukrainians spent almost a billion dollars on cars from abroad in the first three months of this year alone. This is almost 100 million more than in the same period of 2020.
Interestingly, in monetary terms, imports are distributed almost equally: of the $ 920 million spent on buying cars abroad, $ 495.6 million. account for new cars, 425.4 million dollars. — used.
Despite quarantine and other external factors, imports have increased over the last year. Demand for cars is not decreasing. Ukrainians need mobility. At the same time, the insufficient number of cars on the secondary market inside the country contributes to the increase in imports of cars from abroad.
The market for imports of used cars is four times larger than the market for imports of new ones. This is because the economic situation in Ukraine encourages the purchase of used cars. People buy what they have the money for, says economist Oleksandr Onyschuk, executive director of the Car Research Institute.
At the same time, the growth of imports of used cars does not lead to a decline in imports of new cars, and vice versa. Compared with 1 sq. Km. In 2020, during this period of 2021, used cars were imported by 5.3%, and new cars — by 22.5%.
The car business has adapted to the conditions of quarantine. The biggest transformations have been the import of used cars: it has transferred a significant number of processes online. Today it is quite easy to organize the purchase of a used car abroad, its delivery and further registration in Ukraine.
WHAT TYPE OF FUEL prevails
Global trends are also affecting Ukraine: the number of imported petrol cars is growing, and the number of diesel cars is decreasing. At the same time, both among new and used cars. Thus, as of 1 sq. Km. In 2021, the vast majority of cars from abroad (61% new and 67% used) are cars with gasoline engines. Diesel cars account for only 25% of new and 29% of used cars.
The share of imported hybrid cars is insignificant in terms of total (8% among new and 2% among used).
Imports of electric vehicles in Ukraine are also insignificant, but do not show an upward trend. In addition, most electric cars are used, also due to the economic situation in the country.
WHERE THEY ARE TAKEN FROM
Most cars imported to Ukraine from abroad, both new and used, are made in the European Union (49% among new and 56% among used). This is facilitated by the geographical proximity of these countries, the convenience and speed of logistics, close economic ties.
The share of imports of new cars made in China has almost doubled, from 12% to 22%. This is facilitated by their low price.
The share of imported used cars from the USA also shows growth : 27.4% in Q1. 2021 against 23.9% for the same period last year. In most cases, these are cars after an accident, sold at insurance auctions in the United States. Despite the complexity of delivering such cars by sea, its high cost and time, the demand for such cars is growing. Mainly due to the relatively "fresh" years of production of these machines, low proven mileage, and low price.
Imports of used cars from South Korea also increased. The cost and delivery time are on average similar to the same parameters for cars from America, but Korean cars are usually sold without damage, including those received in an accident, although often — with much higher mileage.
HOW MUCH DO THEY PAY FOR CUSTOMS CLEARANCE
The tax burden is unevenly distributed: those who buy cheaper cars pay more. The average amount of taxes on imports is twice lower for new cars, compared to cars with mileage. Thus, in the 1st quarter of 2021, for the registration of a new car, with an average cost of 19.3 thousand dollars, an average of 5.4 thousand taxes were paid. This is 28% of the cost. For used cars, which cost an average of 4.2 thousand dollars, Ukrainians paid an average of another 2.4 thousand dollars in taxes. This is almost 60% of the cost of the car.
In total, in the first three months of 2021, $ 387 million was paid to the state budget. At the same time , Ukrainians paid almost twice as much taxes for customs clearance of used cars : $ 247.7 million against $ 139.5 million for new ones.
PROSPECTS OF CAR IMPORT FROM ABROAD
The market of imported cars in Ukraine is quite stable and promising. Given the low level of motorization and the actual insufficient number of cars in Ukraine, the fleet will continue to be replenished with vehicles from abroad.
The growth of imports of new cars is possible in the case of increasing the purchasing power of Ukrainians and the introduction of affordable financial programs — lending and leasing.
The business of importing used cars from abroad is in the process of transformation. From rather chaotic, unsystematic activity of separate "racers" the companies, platforms are formed. Processes are automated and move to the official plane. This process can be considered one of the components of the formation of a civilized car market.
Given the invariability of legislation, including the cost of customs clearance, the potential volume of imports of cars can be estimated at 400-450 thousand used cars and 80-100 thousand new cars from abroad.
The share of used cars made in the European Union will be the majority, but the share of cars from America may continue to increase. The market is not sufficiently saturated with such cars, given the relatively high demand. In general, the share of cars made in America can be 35-40%.
The share of new cars in the geography of imports will not change much, but the potential for growth is in cars from China, due to their relatively low price and rapid development of technology.
Regarding the type of engine, global trends will reduce the share of diesel cars in both imports of new (more) and used (less) vehicles. Most imported cars will be with gasoline engines. The growth of demand for imported electric cars is possible with the reduction of their price, the introduction of affordable credit and leasing conditions, improving the technical characteristics of the car, as well as the development of the infrastructure of charging stations and service points of such cars.
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