Why do Ukrainians buy more expensive cars during the war?
The number of used cars imported to Ukraine has returned to pre-war levels, but their prices have risen. Find out why expectations of a decline in car purchases do not coincide with reality and what is happening in the car market now
It seems that during the war the number of car purchase transactions should have decreased. This is especially true for new cars and premium cars. However, according to Ekonomichna Pravda, despite obvious economic reasons, the situation in Ukraine is quite the opposite.
The publication analyzed almost a million vehicle registrations and found that the average cost of a car is constantly growing and is currently at its highest level in the last four years. This applies to both new and used cars.
Do Ukrainians buy fewer cars during the war?
According to the Ministry of Internal Affairs, in January-September 2020-2021, 60-80 thousand new cars were sold, while only 46 thousand were sold in the same period this year. However, the number of used cars imported from abroad in 2023 exceeded the figures for 2020. At the same time, the biggest boom in purchases occurred in 2023, when the Ukrainian authorities allowed the import of cars with European registration without paying taxes and fees.
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Average cost of cars bought by Ukrainians
According to estimates by Ekonomichna Pravda, based on data from the Ministry of Economy on the cost of cars, the average cost of a new car in January-September this year increased by 20% (UAH 1.56 million) compared to the same periods in 2020-2021. At the same time, the cost of used cars imported from abroad increased by 16% (UAH 430 thousand).
The study also showed that Ukrainians buy not only more expensive cars but also newer ones. Over the years of observation, the lowest age of used cars is now recorded - less than 10 years, while earlier this figure was at the level of 11-12 years.
Why do Ukrainians buy more expensive cars?
The publication notes that such trends can be observed for several reasons. The first is that in 2022-2023, sales of premium brands, such as BMW, Mercedes-Bens, and Lexus, broke all records, as the car market recovered by purchasing the respective cars. In terms of sales, these car brands surpassed the figures for 2021 in 2023 (6.6 thousand cars versus 5.8 thousand, respectively).
However, it is important to note that these purchases are largely made by Ukrainian government officials and their relatives, as after the government abolished mandatory public declarations, officials began to buy cars en masse.
The second reason is "better consumer sentiment among Ukrainians" and the desire to "live here and now." According to WTC Senior Economist Yuriy Gaidai, the growth of the automotive market is an indicator of positive long-term expectations, as cars are expensive durable goods.
We remind you! The war in Ukraine has forced hundreds of businesses to relocate to safe havens. And most businesses are moving using the Ministry of Economy's relocation program. Read more about how many companies have already moved to other regions and how to do it in our previous article.
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