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Car production in Ukraine in 2010 will probably remain at the 2009 level (over 69,000 vehicles), according to Ukrautoprom CEO Yefim Khazan...
"Today we don`t see factors that fueling [a rise in] car production in 2010. I think that it won`t exceed 65,000-70,000 vehicles," he said at a roundtable devoted to the state of the Ukrainian car industry.
Khazan said that one of the problems of car production in Ukraine in 2009 in the light of an 84% plunge compared to 2008 was a reduction in the workforce. He said if as of January 1, 2008 52,000 employees worked at vehicle assemble companies, while as of July 1, 2009 it was only 30,000 people.
He also said that while in 2008 the vehicle building sector`s share of Ukraine`s GDP exceeded 4%, in 2009 there were almost no payments to the national budget from the car building sector.
Khazan said that the vehicle building sector`s share of the total car market structure also dropped: while in 2008 the import to production ratio was 50:50, in 2009 the production share shrank to 30%.
He said that at present full-scale production facilities to assemble 350,000 vehicles were created in Ukraine, which considerably exceeds the country`s needs.
"We needs to search for export markets to use the facilities to full capacity, of course not in Europe, but in Africa and Asia," he said.
He added that taking into account the situation with excess capacity, the association will try to achieve a return of a 13% extra charge on import duty on cars, while car importers continue opposing it.
In addition, among other legal initiatives in which Ukrautoprom takes part, is the drawing up of a special law on the development of the car industry and the adoption of a new concept for the development of the car industry, which today are being agreed in ministries and bodies.
Commenting on the price situation on the car market this year, Khazan said a fall in the price of cars produced in Ukraine is not expected.
"Taking into account the production plunge, the continual growth of production cost and a rise in the price of car parts, one should not expect the fall in prices of cars in dollars, although the price could fall in hryvnias if the dollar depreciates," Khazan said.
A total of 69,295 vehicles were produced in Ukraine in 2009, which is only 16.4% of the figure for 2008.
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