Business news from Ukraine

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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STATE-RUN UKRPOSHTA TO BUY 500 CARS

JSC Ukrposhta will sign financial lease contracts for the purchase of 500 cars from Ukrlada LLC for the implementation of the Mobile Offices project on April 10, the company’s press service said on Thursday, April 9.
The contracts signing will be hold online with the participation of Director General of Ukrposhta Igor Smelyansky, Minister of Infrastructure of Ukraine Vladyslav Krykliy, Director of Ukrlada Hanna Bilozerova and chairman of the board of FUIB Serhiy Chernenko.
According to ProZorro, the following companies took part in the tender for the purchase of 500 passenger cars for organizing mobile offices: Arma Motors LLC, Ukrlada Trading House, Europa Plus LLC and Vidi Avenue LLC. The winner was Ukrlada, which offered the lot value in EUR 8.445 million that is 5.11% lower than the expected purchase price.

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UKRAINIAN PARLIAMENT POSTPONES INTRODUCTION OF EURO 6 STANDARD FOR CARS

The Verkhovna Rada of Ukraine has postponed the introduction of the Euro 6 emission standard for cars during their production and import from 2020 until 2025.
Some 356 Members of Parliament voted in favor of bill No. 2078-1 as a whole with technical and legal amendments, while the minimum number of votes necessary for the adoption of the document was 226, according to an Interfax-Ukraine reporter.

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UKRAINIANS REGISTER 23,000 IMPORTED USED PASSENGER CARS IN SEPTEMBER

Ukrainians registered 23,000 imported used passenger cars in September, which is 3.2 times more than the registrations of new passenger cars in the same month, the Ukrautoprom association has reported.
Compared with September 2018 registrations of imported used passenger cars grew 2.3 times, and their share of the primary market grew from 60% to 76%.
The most popular car was Volkswagen Passat (1,460 cars registered). Renault Megane with 1,315 cars, and Skoda Octavia with 1,203 cars was third.
Volkswagen Golf with 912 registrations was fourth and Ford Focus with 789 used cars registered was fifth.
The association said that since the start of 2019, 321,600 imported used passenger cars have been registered in Ukraine, which is 4.5 times more than a year ago. The new passenger car market over the period was only 61,700 cars.
On September 12, 2019, the Verkhovna Rada repeatedly postponed the application of fines for owners of cars with foreign license plates for 90 days.

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AIS STARTS SELLING CHINA’S FAW GROUP BRAND CARS IN UKRAINE

AIS Group of Companies, an exclusive distributor of China’s FAW Group brand cars in Ukraine, plans start selling five models of cars under this brand in all categories (small tonnage, small commercial, medium tonnage and heavy tonnage vehicles) on Ukrainian market in the next few months of this year. As the company’s press release said, the start of sales was scheduled for October. A FAW B30 compact passenger sedan with a 1.6-liter petrol engine rated at 109 l/s with a 6-speed AISIN Japan’s automatic transmission will be the first model to sell.
It also planned to start selling a FAW X40 compact crossovers with a 1.6-liter petrol engine rated at 109 l/s with manual transmission.
“These models will be competitive to European, Korean, Chinese brands, which will be offered under the most affordable price,” the company said in its press release.
Besides, the company will offer a FAW Tiger VR small commercial vehicle with a carrying capacity of up to 1.5 tonnes with a 2.3-liter Weichai diesel engine with 110 l/s, with a reinforced frame and chassis, anti-lock braking system and power steering; and a FAW Tiger V medium tonnage truck with a load capacity of 4.7 tonnes with a 3.8-liter Cummins diesel engine with 139 l/s and ZF transmission.
“It is planned that a FAW Tiger model line will compete with GAZ commercial and cargo vehicles,” the Group said.
Moreover, by the end of the year market will see two modifications of large tonnage dump trucks FAW J6P 6х4 и FAW J6P 8х4 of wheel configuration, engine power 375 l/s and 390 l/s and a load capacity of 19 and 23.6 tonnes respectively.
Leading world leaders alike Bosch, Wabco, Sachs, ZF, Fast, Eisenmann, TRW, Tenneco and others are suppliers of the component parts for production of FAW cargo vehicles.
As reported, the AIS Group, a leading operator selling and servicing vehicles for business in Ukraine, signed an exclusive distribution agreement with China First Automotive Group Corporation (FAW).
Under the agreement, the AIS Group will present FAW trucks in Ukraine.
AIS group of companies, established in 1992, is the national network of auto centers and service stations, spares stores, a manufacturing enterprise, regional automobile warehouses and a logistics center for storage and distribution of spare parts, a customs and licensed warehouse, and a motor transport company.

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