Life after clinical death. Car sales picking up after a substantial decline

Buyers are back on the car market. In June 8,130 new cars were sold in Ukraine, which is 2.6 times more compared with May, according to AUTO-Consulting. Compared with June 2013, sales declined by 46.4% from 15,160 cars.

As a reminder, in May car sales beat all anti-records. Only around 3,000 new cars were sold during the last month of spring, which is three times less than in April and five times less than in May 2013.

Toyota topped the sales in June selling 773 cars. Director of AUTO-Consulting Oleh Omelnytskiy explains that the supplier expanded the range with a new, cheaper modification of the SUV Toyota Highlander. Expert says that other models of the Japanese manufacturer, including Corolla, Camry and RAV4 also enjoy popularity. ZAZ and Geely finished the month in second and third places respectively.

Attracted by discounts

There are several reasons why car sales increased. In May, car sales traditionally fall due to the long holiday break, says Omelnytskiy. In addition to that, car importers and dealerships conducted many advertising campaigns in June and offered cars at a preferential exchange rate, specifically UAH 10-10.6/US $1. “For buyers this was one of the last chances to buy a car at a low exchange rate,” notes Omelnytskiy.

Stabilization of the political situation in the country after the presidential elections also contributed to the situation on the car sales market, says Omelnytskiy. This explains the increase in the sales of premium and luxury cars compared with May. For example, according to AUTO-Consulting, Maserati, Ferrari, Rolls-Royce renewed their sales in June. Not a single car of these brands was sold in May. Sales of Mercedes Benz more than doubled to 227 vehicles and Land Rover and BMW more than tripled to 165 vehicles and 124 vehicles respectively. Director of Europa-Avto (official dealer of Skoda) Vadym Palamarchuk adds that the buyers were interested in, among other cars, renewed models of Mercedes and Audi.

Special offers to continue

Decline of the market in June 2014 compared to the same month last year is primarily explained by hryvnia devaluation, which led to a decrease in demand due to lower purchasing power. In addition, car sales in the Donetsk and Luhansk oblast, where the anti-terrorist operations are being conducted, have seized completely. Ukrainian car dealers also no longer supply vehicles to the annexed Crimea. In total, these three regions accounted for 25% of the domestic car market, says Omelnytskiy.

Car sales in May hit rock bottom. “The market started to show the initial signs of stabilization. If the situation in the east stabilizes, the market will exceed 100,000 vehicles by the end of the year, and if not – we may not even achieve this result,” predicts Marketing Director of the AIS Group Serhiy Borovyk.

Palamarchuk expects sales in 2014 to reach 100,000-150,000 cars. Last year over 200,000 cars were sold, according to AUTO-Consulting. The dealerships will continue different loyalty programs until the end of the year. Palamarchuk believes that there are enough imported cars at the rate of UAH 10-11/US $ 1 to last through July and August.