Chinese cars are taking over Ukrainian streets. As the economy shrinks due to the COVID-19 pandemic, registrations of Chinese cars have nonetheless increased by a quarter, according to recent statistics.
That suggests that China may be poised to radically alter the post-coronavirus automotive market in Ukraine.
In April, Ukrainians purchased only 3,700 new cars. Between January and April alone, they purchased 945 new Chinese vehicles.
In early 2014, Chinese manufacturers enjoyed up to a 12.4% market share in Ukraine. In 2013, the total values of Chinese automotive imports to Ukraine was $124 million.
Then, after the 2014 Euromaidan Revolution, the country implemented economic reforms and this figure slumped to as low as $6.86 million in 2016 as the Ukrainian automotive industry became more competitive.
However, in 2017, the sale of Chinese vehicles in Ukraine nearly doubled year on year, according to statistics by the Observatory of Economic Complexity (OEC). While statistics are lacking for the subsequent years, experts say the figures are likely similar.
But while Chinese cars will likely continue to conquer the Ukrainian market, there are some serious unanswered questions about their safety and quality, experts say.
Price and quality
The most popular Chinese car purchased in Ukraine is the Chery Tiggo 2. The Tiggo is heavily “inspired” by the Toyota RAV 4 crossover — sometimes to the point of being nearly identical to the RAV 4.
The most obvious difference, however, is its price.
Purchasing a brand-new Toyota RAV 4 in Ukraine is expected to cost $24,835 (Hr 686,664) — and that’s just for the most basic model. On the other hand, a new Chery Tiggo 2 in Ukraine sells from just $11,200 (Hr 310,514) — less than half the price.
Reviews of the Tiggo are mixed. Older Tiggo models and other Chery cars are featured on a list of the seven “Worst Cars in the World.”
Newer models, such as the 2020 Chery Tiggo 2, have received better reviews. One review noted that the vehicle was “rough around the edges,” but the overall build quality and performance had significantly improved.
The car is highly popular in the Philippines, where it has garnered positive reviews for its improved build quality and value for money. Filipino car review site Philkotse.com stated that “Chery has a very wonderful future ahead of it…”
Ukrainian car reviewer autooconsulting.ua urged customers to test drive the Tiggo and to try to ignore the unfamiliar logo on the back.
Crash safety
But for all its similarities to the Rav 4, the Tiggo’s resemblance stops at crash safety. It’s a problem that plagues many Chinese vehicles.
The Chery Tiggo 3 infamously scored a 0 star rating in crash safety from the Latin American subsidiary of Global New Car Assessment Program (NCAP) in 2019. The results of the test concluded that a frontal collision would likely lead to “life threatening injuries.”
In 2011, the Chery J11 was rated the least safe SUV in Australia by the Australian subsidiary of NCAP.
The Chinese subsidiary of NCAP, which claims that it tests cars to European standards, recently gave the Chery Tiggo 8 a 5-star rating in crash safety. However, many doubt the objectivity of these tests — even experts in China.
According to Chinese automotive experts Gasgoo, the organization lacks operational independence and has given 5-star reviews to 90% of the cars that it has reviewed.
Chinese cars are not widely sold on the European market. As a result, they are not reviewed under the European NPAC. It reviews cars based on the sales of vehicles to European Union countries.
Since Chinese manufacturers do not target the EU market, their vehicles do not get reviewed by the European NPAC. That means Ukrainian consumers are forced to seek crash safety data from Asia or Latin America.
But Chinese car showrooms in Ukraine only provide customers with the Chinese NPAC ratings, which are usually higher than the ratings given by other countries.
Recently, however, more Chinese-manufactured cars have started to pass independent crash safety tests with flying colors. In the Australian NCAP (ANCAP) tests in 2017, both the LDV T60 and Haval H2 received 5-star crash safety certificates.
Experts advise buyers to seek genuine crash safety rankings of the specific model of Chinese car that they are interested in, as crash safety varies widely between models and producers.
Crash safety is of great importance in Ukraine. The country was found to have one of the highest traffic mortality rates in Europe, ranking 6th in road deaths.
Industry verdict
Regardless of their crash test rankings, the popularity of Chinese cars is growing in Ukraine.
“Even before the coronavirus crisis, Chinese cars were selling rather well in Ukraine,” said Oleh Nazarenko, director of the All-Ukrainian Association of Automobile Importers and Dealers. “However, with the crisis, there may be a bigger demand for Chinese vehicles out of need for security.”
“Just imagine if someone was saving up money to buy a Volkswagen, and then the virus hit. With all the public transport down and the need to stay away from others, a buyer will be ready to get a less luxurious car, and instead go for a Dacia, Skoda or something from China,” he said. “The customer understands that he can’t delay this any longer, and having a private vehicle just becomes a matter of family health security.”
Still, the Chinese car industry faces many hurdles. The biggest one is vehicle service, Nazarenko says.
“Prior to 2008, many manufacturers had offices in the country, which gave confidence to the purchasers and was the reason Chinese cars were more abundant,” he said. “Drivers knew that if their vehicle breaks down, they could go to a repair shop which would offer original parts.
“But, now, owners of Chinese vehicles must rely on third party companies to deliver parts, and then find an appropriate mechanic to make the repairs.”
Despite these problems, the growing Chinese automotive industry could provide new economic opportunities for Ukrainians.
“China is a very aggressive economy… It is desperate to get into Europe and begin competing with Korean and Japanese manufacturers,” Nazarenko said. “The one problem Chinese manufacturers have to overcome is the import tariff… Ukraine, which has a trade agreement with the EU since 2017, is also a potential hot spot for manufacturing.”
Ukraine’s ZAZ automotive factory already manufactures Chery A13 vehicles using parts from China.
“The free trade agreements mean that, whether the EU likes it or not, it will have to allow for import of Chinese cars,” Nazarenko said. “This actually has a potential to change the taste of the European customer, who may start to change their patriotic culture of purchasing their domestically produced vehicles and buy something cheaper instead.”
Even safety isn’t an insurmountable hurdle. Nazarenko says that Chinese cars from 15-20 years ago simply cannot be compared to vehicles like Great Wall’s Haval model because the improvements have been so great.
Moreover, poor safety ratings worry Ukrainians less than people from other countries.
“The psychology of Ukrainians is not to rely on authorities such as rating agencies, but to see the responses of common folk,” Nazarenko said, “which explains why Opel and Saab, popular in other countries, didn’t manage to find buyers here.”
For these reasons, he is confident that Chinese made vehicles have a bright future in Ukraine. In fact, he is even considering buying one for his own company.
“Right now the association is trying to pick out a car which we will use for our work,” he said. “Exploring the market, we are eyeing Great Wall’s Haval, which has a good cost to quality ratio.”
