Business news from Ukraine

ZAPORIZHIA AUTOMOBILE BUILDING PLANT PRODUCES 1,742 CARS IN 2021

JSC Zaporizhia Automobile Building Plant (ZAZ) in January-May of this year produced 1,742 passenger cars, while in the same period of 2020 – none, according to the statistics of the Ukrautoprom association.
At the same time, the plant produced 417 passenger cars in May, compared to 472 passenger cars in April this year.
The plant also produced 39 buses over the five months versus 13 buses a year earlier.
According to the statistics of the association, the second Ukrainian manufacturer of passenger cars, the Eurocar plant (Zakarpattia region), in January-May produced 1,796 Skoda passenger cars using the SKD assembly method, which is 35.5% more than in the same period last year, including 527 cars produced in May (6 times more than in May 2020).
As reported, taking into account these production indicators of the two plants, the production of passenger cars in Ukraine in January-May increased 2.7-fold, to 3,538 cars.
ZAZ is a leading automobile manufacturing plant with the capacity for full-scale production of automobiles. The plant is part of the Ukrainian Automobile Corporation (UkrAVTO), owned by Tariel Vasadze.
The corporation’s brand portfolio includes passenger cars Chery, Lada, Chevrolet, Kia, Renault, as well as Mercedes, Jeep, Maserati, and buses of several classes.

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ZAPORIZHIA PLANT PLANS TO PRODUCE 10,000 CARS IN 2021

JSC Zaporizhia Automobile Building Plant (ZAZ) intends to produce 10,000 cars in 2021 after resuming their production last year, said head of Zaporizhia Regional State Administration Oleksandr Starukh.
“The enterprise suspended its production, now it has been resumed, and everything is started small … We signed an agreement with Renault – this year we will have 10,000 cars,” Starukh said during the UkraineInvest Talks: Dnipro forum on Thursday.
According to him, in the first quarter of this year, ZAZ also sold 50 buses to Poland.
As reported, in 2018, ZAZ, due to economic inexpediency and in the absence of state programs to stimulate the automotive industry, stopped the production of passenger cars, the production of which was the leader in the country for many years. But in September 2020, Groupe Renault officially announced the start of production of passenger cars for the local market.

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KIEV METRO TO BUY 50 NEW METRO CARS

The European Bank for Reconstruction and Development (EBRD) and Kyiv Metropoliten have signed a loan agreement in the amount of EUR 50 million for the purchase of 50 new metro cars.
According to the website of Kyiv City State Administration, Kyiv City Council and the EBRD signed the necessary guarantee agreement.
“Today we are signing a loan agreement between the EBRD and Kyiv Metropoliten and a guarantee agreement between Kyiv City Council and the EBRD. And I hope that by the end of this year we will conclude a contract for the purchase of new cars for Kyiv Metropoliten. Under the terms of the loan, the city will receive an installment payment plan from the EBRD for 12 years,” Mayor of Kyiv Vitali Klitschko said.
He also said that now Kyiv is building two new metro stations in Vynohradar residential area – Mostytska and Prospekt Pravdy.
“We plan to open them by the end of the year. Today, more than 700 meters of 1.3 km of tunnel underground have been developed in the direction of the Syretska metro station. A tunnel is being built between the future stations Mostytska and Prospekt Pravdy. Therefore, these cars will serve the Syretsko-Pecherska line of the metro,” Klitschko said.
According to the EBRD, improving communication with the Vynohradar residential area by opening two new metro stations will help reduce the use of private cars and improve air quality.

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OPEL BRAND IN UKRAINE INCREASES SALES OF CARS BY 84% IN 2020

The Opel brand in Ukraine in 2020 increased sales of cars (passenger cars and LCVs) by 84% compared to 2019, to 732 vehicles with an overall decline of this market by 2.2% (to 95,500 vehicles), the press service of the PSA group’s representative office in Ukraine, Peugeot Citroen Ukraine, has reported.
According to the report, sales growth was primarily driven by well-known models of the brand: the Opel Grandland X crossover (248 vehicles sold, which is 92% more), the Opel Crossland X compact crossover (174 vehicles, twice more) and the Opel Astra sedan (156 vehicles, 28% more).
Last year, several new models also debuted on the Ukrainian market, in particular, the sixth generation Opel Corsa, sales of which began in the middle of the year, and 37 cars were sold at the end of the year.
In addition, sales of Opel Combo commercial vehicles (passenger version of Combo Life and commercial van Combo Cargo) began in 2020, of which 84 were sold.
“Thanks to the launch of the line of commercial vehicles, the Opel brand is returning to the LCV segment again as a serious player and intends to significantly increase sales in 2021,” the press service said, specifying that last year a full line of Opel commercial vehicles was presented in Ukraine: Combo Life, Zafira Life, Combo Cargo, Vivaro, and Movano.
According to the report, despite all the problems and limitations of 2020, Opel continued developing its own dealer network in Ukraine, in particular, two new dealers were opened in the autumn of the year: Addis-Motors (Odesa) and Newton (Cherkasy), which are the only representatives of the brand in these cities.
At the end of the year, the brand’s dealer network includes 11 representative offices (three in Kyiv, one each in Dnipro, Lviv, Zaporizhia, Poltava, Kharkiv, Khmelnitsky, Odesa and Cherkasy), and four service partners who can carry out service without losing the guarantee: in Kyiv (two), Ivano-Frankivsk and Zhytomyr.

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BAN ON REGISTRATION IN UKRAINE OF SALVAGED CARS FROM ABROAD TO ENTAIL $327 MLN BUDGET LOSSES/YEAR –COMPANY

Changes to the registration of vehicles, initiated by the Interior Ministry of Ukraine, which, in particular, prohibit the registration of cars with salvage titles imported from abroad, will create problems for companies involved in this business, will make it impossible for Ukrainians to buy such cars with a clear history at reasonable prices and also entail losses of the national budget in the amount of at least $327 million, according to Columb Trade company.
“Now more than 90% of cars with salvage titles come to Ukraine with such documents (marked for recycling), but in fact they have minor damage (lighting, bumpers, wings) and after restoration pass certification in authorized bodies. The proposed changes may replace the functionality of certification bodies, while citizens are deprived of the opportunity to purchase a car with a clear history of origin,” Roman Voloshin, a lawyer of the company, said at a press conference at Interfax-Ukraine.
He emphasized that in general the draft resolution, posted on the website of the Interior Ministry for discussion, contains many positive norms that will simplify the process of registration (re-registration of a car), however, two provisions on the prohibition of registration of cars with salvage titles, as well as on the need for mandatory translation of accompanying documents to the official language with an apostille will create chaos in the market, will entail additional costs for buyers and budget losses.
“Only the requirement of compulsory apostille, according to our calculations, will lead to additional costs for buyers of $200-300,” Voloshin said.
According to the calculations cited by Columb Trade co-founder Volodymyr Kovel, about 36,800 people who want to buy a car from abroad can suffer from such innovations (registration ban).
“The transit of a car from the United States takes three months, and the average monthly supply is 10,000 cars. Now 30,000 cars are in transit. Even minor repairs, taking into account certification and registration, take about a month. Respectively, there will be 40,000 such cars, not yet registered, of which 92% with the status of to be recycled, that is, 36,800 cars,” Kovel said.
He considers it incorrect to take into account the status of recycling, which the United States accept for itself, since there it is done by the method of financial accounting of the residual value of a car, while the damage can be minor and in Ukraine they can be repaired for $2,500-3,000.
Kovel stressed that these restrictions will not force Ukrainians to refuse buying cars from abroad, and they will be forced to buy the same cars from the United States, for example, in Georgia or Latvia, where this business has long been established, but then they will serve the orders of Ukrainians and get receipts from customs clearance and other fees going to the budget of their countries. As a result, the car will cost a Ukrainian almost $3,000 more, taking into account the extension of the logistics chain, the need to bring cars from neighboring countries and other expenses.

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PRESS CONFERENCE ‘NEW DECREE OF CABINET OF MINISTERS OF UKRAINE: HOW DOES STATE PUT NEW OBSTACLES FOR UKRAINIAN CITIZENS FOR PURCHASE OF CARS?’ TO BE HOLD IN KIEV

On Wednesday, July 8, at 11.00, the press center of the Interfax-Ukraine News Agency will host a press conference entitled: “‘New Decree of the Cabinet of Ministers of Ukraine: How does State Put New Obstacles for Ukrainian Citizens for Purchase of Cars?.” Participating will be Columb Trade Co-founder Volodymyr Kovel, Columb Trade Co-founder Pavlo Kazaryan, lawyer Roman Voloshyn (8/5a Reitarska Street).The broadcast will be available on the YouTube channel of Interfax-Ukraine. Admission requires press accreditation.

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