Significant development of the Ukrainian automotive market: car sales growth by 50% in the first half of 2023
Car sales in Ukraine increased by 50% in the first half of 2023, which is an impressive figure and indicates a significant development of the country’s automotive market.
According to AUTO-Consulting, Ukrainians purchased 29,314 new passenger cars worth almost $1 billion between January and June 2023, an 85% increase year-on-year. The number of cars sold exceeded the previous year’s figure by almost 58%, which indicates an increase in demand for cars among Ukrainian consumers.
Oleg Omelnytsky, director of AUTO-Consulting, is also quite optimistic about further sales growth. He predicts that by the end of 2023, new car sales could rise to 70,000 units, up from 40,000 cars sold in 2022. This growth will be the highest in recent years and may even exceed the level of sales in the record-breaking year of 2021, when almost 104,000 new cars were sold.
Currently, the current car market in Ukraine is showing a more positive trend than in previous periods, in particular in 2015-2016. Similar growth rates are observed in the commercial vehicle market, where growth was 52% compared to the first half of 2022.
The main reasons for this dynamic growth of the automotive market in Ukraine can be explained as follows:
- Economic factors: Despite a slight decline in GDP in the first quarter of 2023, forecasts for further economic development point to a certain recovery and growth in consumer demand.
- Political instability: The conditions of hostilities in some regions of the country may encourage businesses and citizens to replace their fleet with more modern and safer vehicles.
- Changes in consumer preferences: In the face of economic instability, consumers are more likely to choose products of higher quality and reliability, which may explain the increased demand for premium cars.
In addition, according to Yuriy Gaidai, senior economist at the Center for Economic Studies, the growth of the automotive market is a positive indicator of the country’s long-term development prospects. The Ukrainian automotive market may continue to show steady growth with increased demand for vehicles of various classes and purposes. Today in Ukraine, certain car brands are becoming increasingly popular and are in the focus of attention of Ukrainian consumers. Here are some of the most popular car brands that are currently being bought in Ukraine:
- Renault: Cars of this French brand are very popular among Ukrainians due to their modern design, reliability, and affordable price range.
- Skoda: The Czech manufacturer Skoda also holds a prominent position in the Ukrainian market, thanks to its spacious and comfortable models, which are popular among family buyers.
- Hyundai: Hyundai cars are gaining popularity due to their technological solutions, efficient fuel consumption and modern design.
- Volkswagen: The German brand Volkswagen has always been at the top of the list of car choices in Ukraine, offering quality cars with a high level of safety and comfort.
- Toyota: Japanese Toyota is known for its reliability and durability, making it a popular choice among Ukrainians who value quality and efficiency.
These car brands have consistently held leading positions in the Ukrainian market due to their performance, value and innovative technologies offered to Ukrainian drivers.
The average cost of new cars in Ukraine in the first half of 2023 was about €33,000. In May and June of this year, the price dropped to €32,000. The car market is stabilizing after significant fluctuations last year, thanks to improved logistics from operators. It should also be noted that no significant price changes are expected by the end of the year.
In the first months of the Russian invasion, the cost of delivering one car to Ukraine increased almost 10 times, to $2000. Now, the cost of delivery has stabilized and is up to $500 per car.
The growth in car sales in Ukraine may also be due to changes in the structure of demand for vehicles. For example, in the first half of 2023, there was an increase in sales of premium cars, which may indicate a certain stabilization of the financial situation of certain groups of the population. Geopolitical instability and changes in consumer preferences also affect the composition of demand in the automotive market.
In addition, the significant development of the commercial segment of the automotive market (up 52% year-on-year) reflects the active involvement of businesses, government agencies and law enforcement agencies in the context of military events and the need to restore logistics and transportation resources.
It is also worth noting that the stabilization of the new car market in Ukraine, confirmed by the decline in average prices, is helping to increase the availability of cars for a wide range of consumers, which may stimulate additional demand in the second half of the year.
Forecasts for the further development of the car market in 2024 are also positive, as the growing demand for vehicles in the face of economic and political difficulties demonstrates the ability of the Ukrainian economy to adapt and develop in the face of uncertainty.
Given these factors, we can expect further positive development of the Ukrainian automotive market, which will contribute to the overall economic recovery and increase confidence in the investment environment in the country.
