Transport difficulties in the Crimean peninsula have partially disrupted car imports to Ukraine through the region’s ports, resulting in a suspension of sales for a number of car brands there according to local dealers. A number of shipments have been redirected through the mainland Ukrainian ports of Nikolaev, Odessa and Illichevsk, raising transport costs and the risks of taking routes through areas marked by ongoing clashes between rival Ukrainian and pro-Russian groups.
The problem is not only that the ports cannot operate normally but that on Perekop, a narrow strip connecting the Crimean peninsula with the mainland of Ukraine, works are already being carried out on a new international border. This week, depending on the results of a referendum, this border could be granted official status with the result that the supplies of cars from Crimea to Ukraine, among others, will be subject to new import and export duties.
This situation, coupled with the uncertainty in the foreign exchange market and the fall of the rate of Ukrainian hrivnya, has forced a number of car importers to suspend sales. According to Alexander Dmiterchuk, the regional director of Renault dealer Atlant-M South, his company received notice from the importer to suspend sales. According to Dmiterchuk, the suspension was for one day and it is not clear whether further disruption is likely.
Marina Yakovleva, CEO of Eurocar, a Skoda dealer in the region, says that because of exchange rate fluctuations and logistics problems, which affected the sale price of vehicles, the company has had to suspend sales, except in certain cases where existing obligations made it necessary. "We hope that as soon as the situation stabilizes, the company will be able to carry out its normal business activities,” she said.
Furthermore, according to Sergey Borovik, director of marketing at Ukrainian dealer AIS Group, importers of a number of vehicle brands have sent letters asking to limit the sale of cars, as they cannot guarantee continued supplies.
A number of vehicle shipments that were expected in March have been urgently redirected to the ports of Nikolaev, Odessa and Ilichevsk located on the mainland part of Ukraine. "This increases the cost of logistics, because the geographical location of these ports is worse than the ports of Crimea, but the overall cost rise is not critical," said Yuri Grischuk director of Car Dealer.
However, according to him, the problem is that these ports are also located in areas where protest and riots are taking place. In Odessa, there have been two weeks of clashes between the authorities and pro-Russian activists.
The situation is causing concern for transport and logistics providers in the region. According to a spokesperson for Avtologistika the situation in Ukraine is very tense.
"We are very concerned about currently developments," she said. "However, the PDI centre in Illichevsk continues to operate normally without any interruption to the transport routes. We hop that it won't be necessary to implement any contingency plans to our logistics."
Grischuk said that with such serious instability, there were serious risks to its business.
“More importantly, it is unclear whether there is any sense in continuing to import cars because, according to official statistics, in January sales of cars in Ukraine fell 28% to just 14,300 units. And it is predicted that March-April sales could fall by another 20%. I know that market experts are advising producers to suspend the import of cars to Ukraine until the situation stabilizes," he added.