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Auto components market: Ukraine’s potential & strategic moves

Auto components market: Ukraine’s potential & strategic moves. Sergiy Yevtushenko Head of InvestUkraine. International conference for Ukraine’s automotive industry development AutoPROm November 4 th 2013, Kyiv. AUTOMOTIVE MARKET OF UKRAINE. Passenger car market overview.

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Auto components market: Ukraine’s potential & strategic moves

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  1. Auto components market:Ukraine’s potential & strategic moves Sergiy Yevtushenko Head of InvestUkraine International conference for Ukraine’s automotive industry development AutoPROm November 4th 2013, Kyiv

  2. AUTOMOTIVE MARKET OF UKRAINE

  3. Passenger car market overview • Second largest passenger car market in the CIS • Newsales reached 238 thousand units, 15% y-o-y rise, 40% of the 2008 level • Market growth is expected due to: • Low density of cars (191 cars/1000 people) • High average age of car (17 years) • Growing purchasing power index Source: UkrAutoprom

  4. New passenger car sales • Strong and growing demand on imported passenger cars • Value of imported cars – USD 3.3 bn. in 2012 • Largest importers of cars to Ukraine: Russia, Germany, Japan, China, South Korea, UK, Romania, Czech Republic Source: UkrAutoprom

  5. Major car producers 2 4 Bogdan 12,000 units/year KrASZ 3,200 units/year CKD SKD SKD 1 3 ZAZ 40,000 units/year Evrokar 14,500 units/year CKD SKD SKD CKD - complete knock-down SKD - semi-knocked-down Source: Deloitte & Touche USC

  6. Autocomponents manufacturers 2012 450 auto components suppliers, 50 are of foreign origin. Most of the components produced by international suppliers are exported.

  7. WHY UKRAINE?

  8. Location Automotive clusters units produced in 2012 • Central Europe* – 3.15 mln • Russia – 1.9mln • Turkey – 0,57 mln *Czech Republic, Hungary, Poland, Romania,Slovakia

  9. Infrastructure 2012 Pan-European transport corridors • 4 international transport corridors • 18 sea ports • 11 river ports • 22 000 km of railways • 170 000 km of roads

  10. Logistics Performance Index (LPI*) • Ukraine has moved from 102ndto 66thplace in 2 years. • The most significant progress has been reached in: • ability to track and trace consignments • efficiency of customs clearance process • quality of logistics services • Ukraine has overpassed Greece (68), Latvia (76), Georgia (77), Russia (95). 1 155 –worst rank 2 5 – best score Source: World Bank

  11. Labor 2012 Average salaries, USD • Ukraine is very competitive in the costs of labor • Machinery and equipment construction employs240,000 people • Production of electronic and optical equipment employs 150,000 people Source: KPMG

  12. Students in technical schools 2012 300,000 students in technical Universities

  13. Processing raw materials scheme Raw materials • Processing within • 365 days: • Assembling • Disassembling • Modernization Products • No duties • No taxes • No quotas & licensing

  14. Taxes • Tax rates in Ukraine are lower than Europe’s average • Among mentioned countries: • 2ndlowest indirect tax • 2nd lowest corporate tax • 4th lowest individual tax • USD 1.7 bn. of indirect taxes were refunded in 2012 • (58% automatically) Source: KPMG

  15. Conclusions • Ukraine has high potential for auto components manufacturing • Current situation confirms an interest from international companies to Ukrainian market • Ukraine’s strategy is to: • Create efficient auto components market • Attract foreign car manufacturers • Become a strong member of automotive Eastern European cluster

  16. Thank you Sergiy Yevtushenko Head of InvestUkraine 11 VelykaZhytomyrska St. 03032, Kyiv, Ukraine +38 044 270 63 10 info@investukraine.com

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