The number of used diesel cars from abroad has increased in Ukraine

The share of used cars with diesel engines imported from abroad during July-November 2021 increased to almost 50%. According to experts from the Automotive Market Research Institute, this may be due to the period of preferential legalization of the so-called «europlates», which lasted during this period. Read more about the possible causes and consequences.

If we consider the structure of imported cars with mileage by engine type, it is noticeable that in January 2021 the share of diesel cars was at about 30%. In the first 6 months of the year, this proportion remained the same, but in July it started to grow. Along with the overall increase in the number of first registrations of used diesel cars from abroad, the share of diesel cars grew from month to month. In November, it reached an annual high of 48% of the total.

The last time the share of diesel cars among the «freshly driven» was more than 40%, in December 2019. Experts from the Institute of Automotive Research identify several reasons for such a sharp increase:

1. The main reason is the grace period of «legalization» of the so-called «europlates». These are cars with foreign registration, which were imported to Ukraine before December 31, 2020, which were used by Ukrainians without proper registration. Much of such cars were with diesel engines. This thesis is confirmed by the fact that the last wave of legalization lasted from June 15 to November 10, 2021. The increase in the number of diesel cars was recorded during this period.
2. Another reason is the shortage and rise in price of used cars abroad due to the global crisis in the automotive industry due to lack of components. As the demand for cars with mileage has increased significantly in the European Union, it has become more difficult to buy a vehicle for export to Ukraine. Due to the peculiarities of the law and taxation, Europeans are much more likely to choose gasoline cars. It is easier for Ukrainians to buy diesel cars in such conditions, their choice is greater. It could also affect import trends.
3. The third reason follows from the previous one. In conditions of shortage, the value of goods always increases. Gasoline cars with mileage in the EU have risen in price more than diesel. Since the most decisive factor in buying a car in Ukraine is its price, and most sales in the market are in the lower price range, this encourages the car business to buy cheaper diesel cars instead of gasoline.
4. The share of used cars from the Americas has decreased. Due to the specifics of the local market, most cars exported from the United States are equipped with gasoline engines. Reducing the share of «American» cars in the structure of imports proportionally entails a reduction in the share of cars with gasoline engines.

Analysts at the Automotive Market Research Institute note that this trend is a temporary phenomenon in the Ukrainian car market. As the grace period for the «legalization» of the so-called «europlates» has already ended, in December the share of diesel cars among the «freshly imported» should decrease. However, it may take longer to return to early 2021. Although the current formula of excise tax makes buying a diesel car abroad less profitable, the global trend of increasing the cost of used cars abroad may for some time encourage Ukrainians to buy cheaper diesel cars in the European Union.

As for the consequences, experts also predict an increase in the share of resale of cars with diesel engines in the domestic market, as it is proven that the import of used cars provokes an increase in resale within the country. However, such changes will be temporary and will not be able to radically change the structure of Ukraineʼs fleet. If carmakers manage to minimize the impact of the global crisis in the automotive industry, the market structure will be able to return to previous levels in a few months.

Significant changes may occur when a mandatory technical inspection of private passenger transport on the European model is introduced in Ukraine. Maintenance of diesel cars, especially with high mileage, is much more expensive compared to gasoline. Because no one today controls the emissions of these cars and the availability of all the parts provided by the design, such as catalytic converters and soot filters, many car owners simply «cut» these elements. Compliance monitoring could provoke massive reductions in the cost of such diesel cars in the future.

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