Ukraine and the luxury car market. How record highs were reached in the first four months of the year – Q Magazine

Ukraine and the luxury car market. How record highs were reached in the first four months of the year – Q Magazine
Ukraine and the luxury car market. How record highs were reached in the first four months of the year – Q Magazine

In Ukraine, sales of luxury cars rose to a record level. In the first four months of the year, the sale of luxury cars increased by 112% compared to the same period last year, according to Strana Today.

Russian scheme

“If the previous premium brands rarely made it into the top 10 best-selling cars, then in recent months they have risen significantly in the rankings. For example, BMW is in 4th place, Mercedes in 7th place. Even Lexus is in the top 10. And the rest of the sales of expensive cars are growing, for example, at Audi, Land Rover, Porshe almost doubled,” Oleg Omelnitsky, head of AutoConsulting, told the Ukrainian publication.

There are several explanations for this boom.

Wealthy Ukrainians are actively updating their car fleet. “The war did not hit the traditional target audience of premium brands as significantly as, for example, the mid-range or budget segment. In addition, many decided not to postpone the upgrade of the car until better times, deciding that they only live once“, says Omelnytsky.

According to the association “Ukravtoprom”, in the first four months of the year, almost 1,300 new BMWs and about 1,000 Mercedes were sold in Ukraine.

The main reason for record sales is that premium cars from Ukrainian car dealerships entered a more complex scheme.

Recently, the General Prosecutor’s Office of Ukraine reported on the investigation of a businessman from Lviv who was buying luxury cars in Ukraine and sending them to Belarus via Poland. From Belarus, they took the road to Russia. In the period 2022-2023, the businessman had illegally shipped 45 cars for a total amount of more than 3 million euros.

“EU sanctions have led to the fact that most of the world’s well-known car brands have stopped operating in the Russian car market. Only the Russian and Chinese brands remain,” explained Olmenitsky who emphasized that this could only be the tip of the iceberg.

Chinese scheme

Another scheme gaining momentum in the Ukrainian market is the supply of electric vehicles from China. Thanks to it, the share of electric cars increased from 5% in 2022 to 18% and continues to grow. After all, the price for such cars is at least 15-20% lower than in official showrooms.

“China has a program to stimulate sales of electric vehicles – buyers are given a subsidy of about 7 thousand dollars. Our intermediaries through Chinese partners buy cars and deliver them to Ukraine. Basically, the goods go to Romanian ports, and then by road. in our country. This is the most active scheme under development in the Chernivtsi region, where there has already been a record increase in electric car registrations. It is clear that the import is unofficial, there is no official service. This is a classic gray market that we almost managed to get away with in previous years. At the beginning of 2022, the share of the gray market did not exceed 2%, and according to the results of the 4 months of this year it reached 14%, and in some months it was 16% and even 18%”, says Omelnitski for Strana Today.

Supplying electric vehicles from China has become a profitable business because you actually only have to invest in the purchase of the car itself, as customs duties are zero for this type of vehicle.

Electric vehicles in China are relatively cheap, which allows suppliers to offer a good price.

“For example, the new Honda M-NV electric crossover Gray with a power reserve of 480 kilometers can be bought at a price of up to one million hryvnias. It is difficult to find a regular crossover with even lower performance for this amount,” says Omelnytsky.

Ukrainians fear neither the threat of power outages nor the underdevelopment of the infrastructure for electric cars, especially Chinese ones.

“There are still not enough charging stations in Ukraine. Furthermore, electric vehicles in different markets have different charging ports that are not always suitable for our chargers. This problem exists especially for cars in China, so drivers have to travel in search. of a proper gas station,” says Omelnitsky.

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The article is in Romanian

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