Ukrainian fleet of motor vehicles Low level of consumer trust and unstable situation in housing habitation market may lead to the declination of automobile sales level on the markets in Germany, Great Britain and Spain. However, in Brazil, Russia, India and China the size of sales is expected to rise on 10%, and this is more likely to be in the coming year.

This is not the first pessimistic anticipation of the situation in the fleet of motor vehicles market for 2008. And each time experts say that the pivotal point of declination will be in North America.

Let us remind that in Ukraine there is expected a further growth of autopark. Optimistic prediction of international experts states that the sales growth of cars may change up to 709000.

Ukrainian automobile market has undoubted recommended itself as one of the fast growing European markets of automobile sales. Logically, such a rapid sales growth may activate the development of the Ukrainian motor-car construction. For instance, in Russia activation of automobile market has lead to the fact that foreign motor-car plants started to develop their own industries. In that way the first industry has started – Volkswagen plant in Kaluga (at the present time the largest project – 15000 cars), on December, 21 the Toyota production line is starting its activity (50000-70000 cars) following this, in 2008 in the suburb of St Petersburg will start their activity Nissan (50), General Motors (70000 cars), Suzuki (50000 cars) and Hyundai (100000-200000 cars). All of those industries will start their activity in 2008. At the same time the enlargement of production facilities will happen. This will be observed in such plants as Ford (from 72 up to 125000 cars), Avtoramos (up to 160000 cars) and TaGAZ (from 120000 cars).

Ukrainian motor-car constructors are also taking part in this event. With joint operations of Bogdan corporation and motor-car construction plant in Zaporozhie (ZAO “ZAZ”) there starts the construction of new industry in Borskyi region of Nizhegorodskaya district of Russia. “Russian market is developing very rapidly that is why we can find our own niche for activity here, and rivals are not taken into account”-commented Oleg Svinachuck, director of Bogdan Corporation. The capacity of Russian bus market consists of more than 100000 cars per year. That is why the production capacity of 6000 busses is more likely to be real and it is not even exaggerated”.

But what is happening in the Ukrainian car industry? And is it true that positive perspectives will occur only due to the car sales?

Buying and Producing

Car industry in Ukraine has its roots that take us back to the old traditions. Since the time of Soviet Union the consumers in our and foreign countries have been aware of the production of such industries as ZAZ, LuAZ, KrAZ, LAZ. At the end of 80-th only at the motor-car construction plant in Zaporozhie the size of production was more than 150000 cars per year. After the Soviet Union collapsed economical relations also broke. This has lead to the situation that Ukrainian plants lost their sales market. Moreover, there was observed the largest sales decline almost on each and every Ukrainian automobile industry. But during the last years there are observed high development rates of Ukrainian car industry.

Positive dynamics has been noticed since 2003. According to the Ministry of industry policy of Ukraine the growth of motor-car construction in 2003 was 211,2% in comparison to 2002. The growth of production of passenger cars was 229% and busses 232,7% In 2004 in Ukrainian autopark there was already 5,6 millions of passenger and commercial cars. Taking into account that the population of Ukraine at that time was almost 48,5 million people , 3 years earlier 1000 inhabitants had 115 cars.

In 2006 there happened to be the growth of Ukrainian fleet market of motor vehicles on 6%, which is 7,2 million units, and park of passenger cars on 7%, which is 5,9 mln units. This caused the growth of common amount of cars for 1000 inhabitants – up to 157 units, and passenger cars up to 127 cars for 1000 inhabitants. In 2007 we should expect that Ukrainian fleet of motor vehicles will enlarge up to 7,8 million cars and park of passenger cars up to 6,5 units. This will cause the growth of motorization up to the level of 170 cars for 1000 people and the number of passenger cars for 1000 people up to 138 units. In 2007 the growth of car production was 360000 units and production of passenger cars 340000 units.

In Ukraine there are more than 15 businesses that produce and assemble cars. In whole, large-scale production facilities are found in the Western part of Ukraine (Lvovsky plant, Evrocar in Zakarpatie, Luzkyi plant, OAO Staryi-avto in Lviv disrict). In the Eastern part there are Zaporozhskyi plant, Chasovoyarski plant on Donbas, new bus producer KAMAZUTK in Kharkov. In the center of country there are Borispol plant, Cherkasy bus, Chernigov plant, Kremenchug car assembly plant and AvtoKRAZ. In the Southern part of Ukraine – Kherson car assembly plant AntoRus, Krymavtogaz, Ilichevsk car assembly business of ZAZ in Odessa district

Incut

Ukraine covers 603,7 square kilometers of territory and the length of roads is approximately 17000 km. On the territory of Ukraine work 5 thousand points of technical service for cars.

All the rods lead to points of technical service of cars

The structure of Ukrainian market of spare parts for post warranty cars changes gradually. According to the independent experts the capacity of spare parts market for cars in our country varies from $0,5 to $1 billion. Specialists say that according to conclusions of the first quarter of 2007 Ukrainian spare parts market for commercial transport is now finding itself in a growth boom, at the present time the sales activities have grown significantly. In whole, the spare parts market has grown not less then up to 20 mln Euro. According to statistics, in Western and Southern part of Ukraine the spare parts sales growth in 2007 grew more than 100% comparing to 2005.

Specialists comment that the sales growth in regions depends from retail points of spare parts for lorries.

According to experts the capacity of spare parts in Ukraine in 2007 has grown comparing to the 2006 in 15-30%. Meanwhile, some market operators consider doubling the sales. Consequently, the market of car spare parts is expecting a rapid growth. Within the rise of sales of new cars also grows the number of cars that no longer belong to warranty technical service. And their owners not always buy not original but so called proprietary spare parts.

Ways, leading to success There is no doubt, that Lex Auto Company is a progressive business with an activity that positively influences the development of automobile industry in Ukraine. Active participation in exhibitions is an important issue of company’s marketing strategy. Due to companies participation in largescale international exhibitions expands the geography of partnership relations; moreover, more and more representatives of business circles are getting familiar with industrial and trade potential of Ukraine.

Due to the Ukrainian Trade Center support the company for the first time took part in the ninth Middle East International Motor Show, which was held on November, 18 in Dubai International Conventional and Exhibition Center. Lex Auto Company was the only company that represented Ukraine at such a prestigious event. More than 800 participants and trade representatives visited stand, which belonged to Ukrainian company (pavilion P-14), that showed their interest in the growing Ukrainian automobile market. Overwhelming amount of negotiations with car producers gave positive results. This event was followed by an offer from a wide range of Chinese representatives to visit their country with the objective to negotiate and take part in the Automechanika exhibition in Shankhai

In December, 2007 management of Lex Auto visited China.

Shankhai Automechanika has already gained a reputation of one of the largest professional forums in the field of production car spare parts, components and different accessories. On the exhibition there was showed the whole range of automobile products, including spare parts and tunning systems, maintenance, car washing and technical service. More then 700 companies took part in this exhibition. This caused some enlargement of exhibition territory (up to 46000 square km). The last exhibition Automechanika that was held in Shankhai in December, 2006 attracted more than 12000 visitors from 97 countries, which is 38% higher then in 2004.

Except the participation in exhibition, where one could find a big amount of new information and widen the business net, delegation of Lex Auto had a whole line of negotiations with management.

To sum up, it can be said that in nearest time the size of car industry in Ukraine will expand. At the present moment there is a treaty of car supply in Ukraine which is followed by one of the complete production cycle…