The car market of Ukraine, which several years ago was miniscule, has skyrocketed over 2003-2005 and turned into one of the most promising markets in Eastern Europe. Moreover, the Ukrainian market is striving for the top volume position in Europe as a whole. As of 2005, 265.5 ths. new cars were sold in Ukraine, which is 12th in volume in Europe. If growth rates such as the 25% registered in 2005 continue, Ukraine’s new car market could become one of the largest in Europe. World-leading car producers are already paying more attention to Ukraine, and recognize its potential in the market. Indeed, while the markets in developed countries have stagnated, Ukrainians are buying 20-30% more new cars yearly. Meanwhile, market saturation is not an issue, as Ukraine hardly reaches 120 cars per thousand people, compared to Russia’s 160 cars per thousand.
Before the country became independent, cars were produced by Zaporozhye Automobile Plant (ZAZ; Zaporozhye); specialized cross-country automobiles – by Lutsk Automobile Plant (LuAZ; Lutsk); buses – by Lvov Bus Plant (LAZ; Lvov); and trucks – by Kremenchug Automobile Plant (KrAZ; Kremenchug).
In the 1990s, the companies realized that most vehicle models engineered in Ukraine were outdated and did not correspond to the demand of potential consumers. Modernization at car making enterprises and the re-orientation toward the production of modern car models in the 1990s turned out to be less profitable and more expensive than assembling cars from imported components. The preferences granted to importers of devices and car sets further contributed to the booming car assembling business.
The number of enterprises which actively launched car assembly lines for cars from foreign sets was counted in the dozens. At first they focused on mostly large-unit assembling. Many auto repair enterprises also used to import knock-down vehicles, foremost – of Russian origin, to assemble them further on.
The volume of car assembly and production has maintained rapid growth in 2005. According to available data, gross volume of production and assembly of cars in 2005 was over 210 ths. cars and bus output in 2005 added another 4 ths. vehicles. Production of trucks (unit assembling excluded) totaled 3,571 vehicles. To compare – production of cars in 2004 totaled some 180 ths. vehicles. Output of automobiles over the year rose 22.8%.
