Ukraine Autos Report Q4 2012 - New Market Research Report

New Transportation market report from Business Monitor International: "Ukraine Autos Report Q4 2012"


Boston, MA -- (SBWire) -- 12/27/2012 --Vehicle production in Ukraine declined 30.6% year-on-year (y-o-y) in July, to 6,698 units. Passenger car production fell 31.9% y-o-y in the month, to 6,149 units, and commercial vehicle (trucks and buses) output (CV) dropped 12.3% y-o-y, to 549 units. Over the first seven months of 2012, total vehicle production slumped 19.7% y-o-y, to 46,516 units. The number of passenger cars made fell 21.7% y-o-y in 7M12, to 42,691 units. CV assembly rose 11.5% y-o-y, to 3,825 units.

BMI previously forecasted an 8% decline in vehicle production in 2012, made up of an 8.5% fall in passenger car output, and a 0.5% drop for CVs. In light of these new figures, we are revising down our forecast to a 16.1% decline in vehicle production. We believe passenger cars will be down 18% this year, with CVs up 8.8%.

BMI believes that the CV segment will continue to develop, although remain relatively small for some time on the back of export growth. Conversely, we believe that passenger car production will remain subdued on the back of a weak market dominated by foreign players.

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Domestic Sales

In the first six months of 2012, vehicle sales in Ukraine increased 24.3% y-o-y, to 109,700 units. Imported foreign brands continue to dominate. The domestic vehicle market, although resurgent from 2011, is still considerably below levels seen in 2008. BMI reckons auto manufacturers are increasingly looking to produce vehicles where they sell them. We believe that the weakened domestic market makes Ukraine an unattractive investment choice.

We think much of this resurgence in vehicle sales is the result of 'bounce-back' effects from several years of declining sales, and not a sign of an underlying improvement in the market. BMI expects weak liquidity conditions to continue, which will restrict credit growth to the real sector in Ukraine (see our online service, July 18, 'Monetary Loosening To Prove Ineffectual'). We believe this will abate vehicle sales growth somewhat (particularly in the passenger car segment, which is much larger than the CV segment).

Leading Ukrainian carmaker UkrAVTO anticipates its domestic sales could reach 210,000-220,000 this year, rising to 230,000-240,000 in 2013, reports the Kyiv Post.

UkrAVTO's sales vice president, Vakhtanh Vasadze, said at the opening of the Stolychne Autoshow 2012 in Kyiv on September 7: 'Over the first eight months of 2012 the car market grew only by 5.1%. This is not what we expected, so the sales forecast for this year is 210,000-220,000 cars [in 2011 220,620 passenger cars were sold in Ukraine, a rise of 36% year-over-year], taking into account the present situation, while next year it is expected that no more than 230,000-240,000 cars will be sold.' UkrAVTO's president, Tariel Vasadze, said the market in Ukraine was now in a phase of stagnation, with certain problems stalling the development of the autos sector.

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