What sidelined the Kharkiv Tractor Plant?
By 2015 the truck sales market had plummeted last new 2016 But year — trucks purchasing to despite the about — market an fears 1,400 decisions 80 of made percent economic units it have annually. back increase instability changed. to 3,500 But on Companies to far more more durable expensive in Ukraine Western than are post-soviet starting trucks, which to brands. switch are These um trucks high-quality within the trucks, industry, known are as premi- mostly made by the seven biggest European truck companies — Scania, MAN, Mercedes-benz, Volvo, Renault, DAF, and Iveco. Back in 2011, the premium segment accounted for only 25 percent of the market, or 1,256 units. Last year, this segment had doubled, reaching half of the sales market in Ukraine. Most say that what drives this growth is a growing understanding of the advantages of a good truck. For the past few years, businesses have been thinking longer-term, considering not just the sticker price of the vehicle, but also future fuel and repair expenses, as well as the depreciation value of trucks. “If you buy a MAN truck for 100,000 euros, then in five years it can be sold for 40,000–50,000 euros. If you take a post-soviet truck that costs 60,000 euros, then after five years it has no value,” Oleksandr Ostapovych, commercial director of MAN Truck&bus Ukraine, said. “It will just be scrap metal.” In 2017, MAN sold 512 trucks in Ukraine, 60 percent more than last year, and taking a 14-percent share of the market. In turn, last year MercedesBenz sold 290 trucks in Ukraine, five times more than in 2015. And the same positive trends are seen at Swedish truck company Scania: In 2017, it sold 330 trucks for more than $40 million, which was a 93 percent increase Håkan compared Jyde, the to the managing previous director year. for Scania expanding Ukraine, its operations said that in the Ukraine. company was in “In Poltava, 2017 we Vinnytsia opened and new Mukachevo, service stations and erating since the a beginning new dealership of 2018 of we’ve our own been in op- the city of Kramatorsk,” Jyde said. “We do expect moderate growth in the market for heavy vehicles” this year as well, he said. Another reason for energetic truck sales is the European Union’s environmental standards, which require trucks to have specific emissions standards, such as the Euro 6 standard. Trucks in Ukraine have to comply with these standards by 2020 as part of the country’s nomic agreement the says But EU. political-eco- Ostapovych association with that many truck Ukrainian owners such by to local paying certificates can environ- bribes buy mental ple, tistics For he regulators. on says, exam- trucks stathat are currently switching standard to from the Euro the Euro 5 “are 2 massively falsified, and the number of imported, commercial, used vehicles from the EU this year will be about 12,000–13,000.”
For a big country like Ukraine, which has a vast network of 170,000 kilometers of roads, the size of the truck market is still well below its potential. more,” “In Europe, said Yaroslav these figures Prygara, are ten CEO times of Mercedes-benz in Ukraine. In general, the transportation business depends directly on the economic health of a country — if markets grow then the demand for trucks grows. “When the economy works there is a growing demand for transportation and for new vehicles,” said Yurii Antoniuk, a sales representative for Volvo’s truck segment. Another reason why truck sales went up is linked to road construction development, as the government has allocated $1.8 billion to upgrading road infrastructure this year. Road construction companies use trucks to transport a lot of equipment, driving up demand. “After 2013, there were practically no road builders, while this year we sold them everything we had,” Ostapovych said. But while truck sellers are running out of supply, their customers are running out of qualified drivers as more of them are moving to Poland where salaries are several times higher than in Ukraine. “If before it was alarming, now it's a massive story,” said Prygara. And Ukraine’s roads are still in dire condition, which is continuing to act as a brake on truck sales. “More than half of our service center calls are related to a chassis breaking,” Antoniuk said. “This significantly affects demand, as customers are not prepared to buy a new vehicle and then destroy it on our roads.”
Oleksandr Ostapovych, commercial director of MAN Truck & Bus Ukraine