Global Trade Alert

With Decree No. 25 of 15 January 2014 the Cabinet of Ministers of Ukraine approved a plan for the development of the passenger automobile industry until 2020. The "Concept" has the stated goal of counteracting the significant decline in the local automobile production in the period 2009-2012 provoked by the increased competition from imports due to the reduction of import duties from 25 percent to 10 percent; the reduced demand due to the lack of incentive factors for acquisition of local vehicles; the lack of state support for the local automobile industry; the access to more expensive financial resources of the local enterprises compared to foreign manufacturers. Due to the outlined misbalances, currently the domestic sector is dominated by imports, whose share has increased from 44 per cent in 2006 to 80 per cent in 2012.
Among the listed in the document strategical goals of the Concept with international trade effects are:

• Torestore the share of the domestically-produced cars in the total consumption of motor vehicles on the domestic market from 20 percent in 2012 to 57 percent in the first five years of the program;
• To ensure thedevelopment of high-tech industrial components, including their supply for export;
• To ensure theestablishmentof cooperation with foreign automakerswith regard to the manufacture ofmodern automobile components and spare parts;
• Toimprove the competitiveness of thedomestic enterprises operating in theautomotive and related industriesand to ensure their better representation on the world market;
• To ensure the expansion of exports of products of the domestic auto industry;
• To reduce the import-dependence of the automobile industry.