Analysis of the automotive industry development trends in Ukraine

Abstract

An integral and strategically important part of the Ukraine's machine-building complex is the automotive industry, represented mainly by passenger cars. Decades ago, Ukraine had a powerful automotive complex, occupying a leading position among automakers in Eastern Europe. Unfortunately, today Ukraine's automotive industry is in a difficult situation due to the domestic potential crisis and the intense negative impact of numerous environmental factors, as well as Russian large-scale military invasion. The aim of the study is to develop proposals for the revival of the automotive industry in Ukraine based on the analysis of current trends and economic condition of the industry. The paper describes the main tendencies in the automotive industry of Ukraine during the period 2016-2021. It is stated that since 2014, Russia's armed aggression against Ukraine has led to a significant decline in the car industry. At the same time, the country has deteriorated in economic conditions, which in turn has affected the production of the automotive industry. It is investigated that only six automobile companies represent the automotive industry of Ukraine and the production capacity of which is amounted to about 250,000 cars per year, including large-scale assembly, and by a number of companies producing components and parts for vehicles. The last segment generates 7.7% of the value added of the machine-building industry of Ukraine and is characterized by an average level of value added in production (33.0% in 2020). Proximity to the border with the EU, cheap labor and sufficient raw materials make the western oblasts of Ukraine especially attractive for partnership with European auto giants. It is concluded that there is currently no automotive cluster in Ukraine. Thus, the further scientific investigations may focus on opportunities for creating an automotive cluster in Ukraine in collaboration with leading European partners.