automotive industry pdf

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The potential of automotive industry in Poltava region Kremenchuk, 2012

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The potential of automotive industry in Poltava Region

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Page 1: Automotive industry pdf

The potential of automotive industry

in Poltava region

Kremenchuk, 2012

Page 2: Automotive industry pdf

Outline

• Ukrainian car market

– Major car manufacturers in Ukraine

– SWOT analysis of production cars in Ukraine

• Poltava region

– Investment map of Poltava region

– Automotive industry in Poltava region

• The city of Kremenchuk

– Brief information about the city of Kremenchuk

– Kremenchuk is a place of car production

– Land plot for automobile plant and related enterprises

– Advantages of investing in the automotive industry

Page 3: Automotive industry pdf

Geographical location of Poltava region

Source: Poltava Regional Center for Investment and Development

Page 4: Automotive industry pdf

Ukrainian car market

Page 5: Automotive industry pdf

Ukrainian car market

Concentration of the cars for thousand of people is much lower than

in European countries, or even then in Russia

Source: 2012, PJSC «Deloitte & Touche USC»

178

228

295

301

441

453

0 100 200 300 400 500

Ukraine

Russia

Slovakia

Hungary

CzechRepublic

Poland

Quantity of cars per thousand of people, 2011:

Page 6: Automotive industry pdf

Ukrainian car market

34

6

15

19

26

Structure of demand by the country of production,%:

up to 12thousands ofdollars

12 -15 thousandsof dollars

15 -20 thousandsof dollars

20 -25 thousandsof dollars

from 25thousands ofdollars

Source: 2012, PJSC «Deloitte & Touche USC»

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

VA

Z L

ada

Hyun

da

i

ZA

Z

To

yo

ta

Re

na

ult

Ch

evro

let

Sko

da

Vo

lksw

ag

en

Fo

rd

Nis

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Cars - bestsellers in 2011:

Page 7: Automotive industry pdf

Ukrainian car market

27,82

24,28 17,33

12,79

10,47

5,61 1,70

Structure of demand in the country of production,%:

EU

South Korea

Japan

Russia

Ukraine

China

Other

59 360

20 240

11 656 6 329

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

Volumes of auto in Ukraine,pc.:

Source: 2012, PJSC «Deloitte & Touche USC»

Page 8: Automotive industry pdf

Major car manufacturers in Ukraine

Source: Poltava Regional Center for Investment and Development

Page 9: Automotive industry pdf

SWOT analysis of production cars in Ukraine

Strengths Weaknesses

• Skilled and relatively cheap labor force

• Capacious consumer market

• Geographical and cultural proximity to

the

• European consumers

• Modernization of the infrastructure

related to the holding of Euro 2012

• Developed production capacities

• Pressure on the business of the

various authorities

• Over-regulation and poor predictability

of the economic environment

• The dependence of the economy on

external factors (input prices, demand

in the EU)

• Tax pressure and the complexity of the

tax system

Opportunities Threats

• Trade liberalization with the EU (export

growth in this direction)

• Base of export to Russia

• Rising consumer incomes (more than

70% of households still do not have a

car)

• Full recovery of auto crediting

• State support for automotive industry

(soft loans, tariff protection)

• Restrictions on exports to Russia

(recycling fee, customs regulation)

• Sending of cars from the EU at lower

import duty (including used cars)

• Macroeconomic risks (slowdown in

GDP growth, investment outflows,

reducing of foreign financing)

Source: 2012, PJSC «Deloitte & Touche USC»

Page 10: Automotive industry pdf

Poltava region

Page 11: Automotive industry pdf

Investment map of Poltava region

Map symbols

Source: Poltava Regional Center for Investment and Development

Page 12: Automotive industry pdf

Automotive industry in Poltava region

• Poltava region has a long history of truck production

(since 1958)

• Two universities and six colleges that train personnel

for the automotive industry. Up to 1000 specialists

graduate every year

• Automotive industry employs near 7 000 people

• In the manufacturing process employs about 100 related enterprises (the largest -

HC "AvtoKrAZ" – 4 500 workers, LLC "KrASZ" - 358 employees and PJSC "Vepr" -

42 employees, PJSC "Kremenchug Wheel Plant", JSC "Obod", LLC "Autosteklo",

SPE LLC "Prisadki", LLC "Yuniol", LLC "Krempolimer" and others)

• The level of salary paid to blue-collar workers range from 240 to 300 EURO

• In case of hiring workers from the employment centers, the institution at its own

expense retrains specialists for the needs of investors and reimburses some funds

to enterprises that will hire unemployed people

Source: Poltava Regional Center for Investment and Development

Page 13: Automotive industry pdf

The city of Kremenchuk

Page 14: Automotive industry pdf

Kremenchug is a place of car production

Source: Poltava Regional Center for Investment and Development

Page 15: Automotive industry pdf

Brief information about the city of Kremenchuk

• Krementchuk is an industrial city

• The city area: 10 000 ha

• The population of the city - about 230 thousand people

• Located at the crossing of highways (Boryspil - Kiev and Poltava

Alexandria-Odessa) and railways

• Advanced river transport. River port is available. Requirements for the

ships: draught 3.2 m, length 125 m, type of vessel: river-sea, tonnage: to

3.5 thousand tons

• Distance to Kyiv - 286 km, to Boryspil - 254 km, to Poltava – 119 km, to

Kharkov – 250 km, to Dnepropetrovsk - 162 miles, to Donetsk – 403 km,

to Zaporozhzhya – 225 km, to St. Petersburg – 1 585 km

Source: Poltava Regional Center for Investment and Development

Page 16: Automotive industry pdf

Land plot for automobile plant and related

enterprises

• Land plot is located in Kremenchuk. Territory area adjacent to the Northern industrial hub. The plot is proposed for placement of industrial facilities

• Land area :168.55 ha

• Owner : land city council

Source: Poltava Regional Center for Investment and Development

Land plot

Page 17: Automotive industry pdf

Advantages of investing in the automotive industry

• Exemption from import duties on machinery, equipment and components

(art.287 Customs Code of Ukraine)

• Tax incentives for the project implemented in the automotive industry

• Profits taxed at:

from 01.01.2013 to 31.12.2017 – 0 %;

from 01.01.2018 to 31.12.2017 – 8 %;

from 1.1.2023 – 16 %; (art. 20 Tax Code of Ukraine)

• Available cheap labor force (salary in the automotive industry in the region - 240-300 EUR)

• Local Municipality guarantees the right of land purchasing after the commissioning

• Automatic VAT reimbursement for business (art.200.19 Tax Code of Ukraine)

• Local Municipality guarantees the accelerated procedure of acquiring rights to lease

• Years of experience in the automotive industry

• Experience in automotive exports

Benefits of participation in an industrial park Kremenchug

• Greenfield for the industrial park, which is the property of the local community (up to 6 months)

• Exemption from equity participation in Kremenchug infrastructure development (art. 36 Law

"About industrial parks"

Source: Poltava Regional Center for Investment and Development

Page 18: Automotive industry pdf

Contacts

4, Shkolnyi Lane, of. 41, 45. Poltava, Ukraine. 36003

Leta Dmytro - Acting Director of Poltava Regional Center of

Investment and Development

Tel.: +38-0532-50-08-64

mob. tel.: +38-066-816-52-09

e-mail: [email protected]

skype: leta.dima

www.obladmin.poltava.ua/invest

Roshchina Olga - Marketing Manager

Tel.: +38-0532-56-92-94

mob. tel.: +38-099-918-60-94

e-mail: [email protected]

Source: Poltava Regional Center for Investment and Development