competitive advantage in the market is a free access to component and import
technologies and unlimited exports, free from EU quotas and licensing.
Regarding negative conditions of competition and strategy of the industry and
firms, the low level of competition between car makers is worthless; the presence of
the shadow economy sector; Ukraine's low rating on indicators of transparency and
corruption of the business; low level of cooperation between producers; the annexation
of Crimea and the East of Ukraine situation.
Demand conditions. Positive demand conditions for cluster formation in the
automotive industry are proximity to the European consumer market, favorable
conditions for export; big national car market; an extensive network of dealers and
service companies of component consumers; possibility to sell cars through tender
purchases of governmental and non-governmental organizations.
Among negative conditions of demand should be high standards of quality and
requirements and the absence of direct contracts for the components supply.
Support and interim industries. The market of cars and their components in
Ukraine is quite saturated, there is an extensive network and a high degree of
localization of the components manufacturers in the Western region of the country;
integration of manufacturers into global production chains of foreign car holdings. The
negative factor is the loss of metallurgical industry in the East and the country's low
level of development of the financial and credit system (high interest rate on loans,
high risk of insolvency of insurance companies).
At the end of 2017, Ukrainian automobile production facilities produced 9542
units of vehicles, compared to 2013 (50449 units), which is less on - 81.08%. That is,
production has decreased by almost five times during last five years. Production
volumes in 2017 amounted to 7296 units of passenger cars, and 2246 units of
commercial vehicles. The dynamics of the growth rates of automobile production
volumes is illustrated in figure 2.
Figure 2. Indicator dynamics of production growth of motor vehicles motors in
Ukraine in 2014-2017 years
Source: developed by the author [13]
-43,01
-71,33
5,29
9,93
2014
2015
2016
2017
Increase in the volume of
production of motor vehicles in
Ukraine
- 245 -