Germany has left its mark on technological advances as the birthplace of the automobile in the late 1870s. The place for the invention was no coincidence, since one of the country’s strengths is in building all sorts of machines, from blenders to tractors to airplanes, and of course, vehicles.
Germany remains the biggest producer of cars in Europe, hosting six automobile giant manufacturers – Audi, BMW, Mercedes-Benz, Opel, Porsche and Volkswagen. For some of these companies, Ukraine is the region’s most important market, outside of Russia, with 2012 set to become the best year on record.
“Germans are born with a screwdriver in their hand,” says Oleksandr Timofeev, general director of AWT Bavaria, the official importer and dealer of BMW in Ukraine. “Indeed, Germans are probably the best mechanics in the world.”
In addition to technical proficiency, another distinctive feature of the German automotive sector is its premium section, which includes Audi, BMW, Porsche and industry pioneer Mercedes-Benz.
“There are certain characteristics, by which German cars had always differed from other cars regardless of where they were produced – first of all with their reliability and quality, as well as its premium, because the majority of the premium segment cars are produced in Germany,” says Yaroslav Prygara, general manager of AutoCapital, importer and distributor of Mercedes-Benz in Ukraine.
Even though most German automobile producers began importing their cars to Ukraine shortly after independence, major sales only came in the past decade when disposable income took off in Ukraine’s biggest cities. “When I first came to BMW in 2000, no more than 100 cars were sold,” says BMW’s Timofeev. “This year we will sell more than 2,100 cars.”
“Active development of the Ukrainian market began in 2000 because, before that, it was a market incomparable with the figures we have now,” agrees Mercedes’ Prygara.
When BMW came to the Ukrainian market 20 years ago, their first office was “on Mykhailivska Street, somewhere in the backyard, a very small place, probably like everything else in the 90s,” recalls Timofeev. By contrast, today there are 15 full-blown dealerships throughout Ukraine, employing some 700 people, with a main office located in the upscale Parus business center.
But like any business, car sales plunged in the wake of the 2008 crisis. Importers had to face an overstock of very expensive cars. “2009 was the most difficult year for all operators on the market, because after dynamic growth of the automobile market and then such a steep downturn, many operators ended up with huge warehouses which were inadequate to the market volume,” says Prygara.
Under such circumstances, cost cutting and discounts were inevitable. “Among many things that we have done, we also had warehouse sales (special offers of discounted prices for cars).”
On the bright side, this year was marked by recovery and further growth for German automotives in Ukraine.
With BMW car sales reaching 100 million euros ($127 million), AWT Bavaria anticipates 2012 will be their best year in Ukraine ever. The same holds for Mercedes, with some estimated 15 percent increase car sales in 2012 over 2008 figures, making the Ukrainian market especially important for the German producer. “We are in the Central and Eastern European segment of Daimler concern (which produces Mercedes) and within this segment we have the highest sales, excluding Russia,” notes Prygara. “This year will most probably be the best year in terms of car sales in the history of our dealership.”
With sales booming, AWT Bavaria is investing. Their latest plans include building a large sales and service center outside Kyiv worth some 12 million euros. Existing dealerships cost AWT Bavaria and its partners some 45 million euros while another 15 million euros was invested into new stock.
With BMWs, the most popular models in terms of sales in Ukraine are the 5 series, making up a quarter of total sales, and X5 SUV. Prices for BMWs range from 22,000 euros and up to 163,000 euros.
Meanwhile, the S-class and ML SUV hit the popularity charts for those who prefer Mercedes. Prices for their vehicles start at around 15,500 euros for the two-seat Smart and can go as high as 254,000 euros for a fully loaded Mercedes SLS 63 AMG Roadster GT.
While both brands come from the same premium category and competes with other German premium-class vehicles, each claims to offer advantages of its own.
“BMW’s main motto is pleasure behind the wheel. Indeed this car is designed primarily for the driver,” explained Timofeev.
Prygara praises the brand’s long history: “Mercedes-Benz history equals history of car building altogether. We’re proud that we invented the automobile. During those 125 years (since then), Mercedes-Benz has been a role model of quality, reliability as well as premium.”
Kyiv Post staff writer Maryna Irkliyenko can be reached at [email protected].
