The car market is empty: buyers are small, but Ukrainians are still finding ways to make a profit

Stagnation takes years

After the Covid-16 pandemic hit Europe, the stagnation also hit the Kaunas car market, which is heavily dependent on third-country dealers. Valentinas Naujanis, director of the Varanas company, which manages this market, mentioned that around 60 percent of the cars sold in the market travel abroad and the other part, 40 percent, remains in the domestic market.

The fact that the market is empty is obvious. Here, where the commercial oasis of Kaunas used to flourish, merchants and customers with oriental facial features were filled with bundles of keys, now calm and collected. For geopolitical reasons, the changes in tax policy in the Central Asian countries have long left the representatives of these countries, once highly valued. Asians have been replaced by Ukrainian traders, but their flow has almost ceased.

“Everything stopped in March of last year, we are not recovering until now, the situation is really bad. There are no buyers, just each other. We not only receive foreigners, but also Lithuanians. People are still afraid to drive here, maybe there are police posts on the roads, ”said a bored trader who met at the Kaunas car market.

His colleague hinted that some dealers had to take their cars off the market when the flow of buyers stopped. The weekly rate for an “exposed” car is 15 euros, so it accumulates a considerable amount in a few months, half a year or more, and it is even more difficult to sell a car that has gone up several hundred euros.

“It just came to our knowledge then. Although people can already come to us, with the exception of some municipalities, there is not much to take cars, all those abroad are ‘blocked’. We need all of Europe to free itself, then all those cars must come back to us. Of course, it would be nice if someone gave us money “for nothing,” said V. Naujanis, director of the company that manages the car market, which is going through a difficult time.

The price of cars in Ukraine reaches “spatial” heights

Many cars sold to third-country nationals travel from Kaunas to Ukraine and the “republics” of Donetsk and Lugansk, which are controlled by pro-Russian separatists.

Until the car reaches the final buyer, its price increases two or even three times. More than a thousand. Its transport costs 1 million euros and very high customs duties.

The two Ukrainians who met in the Kaunas car market said that they had to constantly calculate whether the car bought here at an attractive price would be successfully sold in the homeland.

“Customs duties are half and sometimes more than the final price. We focus on cheap cars, we pay 2.5 to 3 thousand for each one of them. USD (2.1 – 2.5 thousand euros) duties We can buy the most expensive ones, but their price increases a lot after customs clearance, it is much more difficult to sell them, “said the Ukrainian, who introduced himself to Igor.

By avoiding customs, the Ukrainians had discovered legislative territory some time ago. There were companies operating in Lithuania that became formal owners of the cars bought here, and a contract was concluded with the actual owner who was allegedly working as a driver. Therefore, cars with Lithuanian license plates circulated on Ukrainian roads without paying customs duties.

“Not anymore, he closed the ‘chrome’,” said the Ukrainian trader.

Igor admitted that he is looking for not only budget cars, but also those with an engine capacity of around 1.4 to 1.6 liters. Because the customs duties of a car also depend on its power.

Significantly increase mileage by avoiding taxes

“Ukrainians not only buy cars with low-power engines, they check whether they were not repainted after the accident, but also falsify the mileage,” the Lithuanians listed on the market said.

If it is still preferred to significantly reduce the odometer readings of a car in Lithuania to mislead the buyer, that the mileage of a multi-year car does not reach 200 thousand. kilometers, the Ukrainians behave the other way around.

They significantly increase the number of miles driven, making the car infinite in age and paying lower taxes.

When the product is sold, the odometer readings change again. Sometimes they come down to a hard-to-understand number, when the mileage of a much “old” car reaches just 100,000. kilometres.

“The minimum number of used cars is at least 15 thousand per year. kilometers, and Lithuanians have no longer believed in incredibly small numbers on the panel. Apparently, in Ukraine there is a slightly different understanding, sometimes even laughter begins to look at their advertisements, ”said Kaunas residents who trade in the market.

The men did not hide the fact that the purchase of cars traveling to Ukraine is being tricked into adjusting their purchase price.

The Donetsk Separatist has its own Lithuanian laws and car numbers.

When communicating with traders in the pandemic market, it became clear that there was an issue that many Lithuanians avoid. These are automobile exports to the “people’s republics” of Donetsk and Lugansk, controlled by pro-Russian separatists.

Traders from these regions visit Kaunas, they simply present themselves as Ukrainians. It turns out that Lithuanians also found a business niche in separatist-controlled territories, several different people mentioned that Lithuanians transport used cars to Donetsk by truck. According to them, the separatists are paid considerable sums for a loaded incoming truck, but the business is still worth it.

The fact that there are several cars with Lithuanian registration in Donetsk can be verified by consulting the specialized advertising portals of the region. Many of the cars sold have special covers, but in some cases it is not a hassle to do so.

In 1999, a VW Passat was produced with Lithuanian numbers, the mileage of which is indicated with 202 thousand. kilometers sold for 4 thousand. euro. The author of the advertisement claims that the car passed through customs, registered in the Donetsk permanent register.

Another production from 1998, much older, of just 228 thousand. kilometers of the supposedly “beaten” VW Passat in Donetsk for sale for 2.4 thousand. euro. Although the car has Lithuanian numbers, the author of the ad claims that it has just been brought from Germany and is not on local roads.

One of the cheapest cars with Lithuanian numbers sold in Donetsk is the 2003 Opel Astra diesel, which costs 1,000 LTL. 175 euros. The mileage is said to be 400 thousand. kilometers, the car was delivered in August 2018 and has not yet cleared customs. It seems that all this time this Opel has been driving on the roads of the breakaway region and will probably be driving for a long time “adorned” with Lithuanian license plates.

A Ukrainian dealer meeting at the Kaunas car market said that completely different rules apply in separatist Donetsk than in Ukraine.

“It just came to our attention then. There they have their own laws, their own order. You can travel with any number, nobody cares. Maybe you can and no numbers at all. They have their own registry, they issue their numbers, but they are recognized only in Donetsk, I will not go anywhere like that, ”said Igor.

The Ukrainian said he did not know how many cars were being transported from Lithuania to the territories controlled by the separatists and said he did not know the people involved. If this is true, it is difficult to say, according to Lithuanian car dealers, the incoming dealers are simply reluctant to open up about connections with the pro-Russian regions of eastern Ukraine.

There is a lack of new cars due to inter-country disruptions.

V. Naujanis, director of the Kaunas car market management company Varanas, observes that the operating methods of the Ukrainian dealers themselves are also changing. If the cars that were previously bought here were transported to the border with Ukraine, from where the buyer had to collect them himself, now the purchases travel to Ukraine by road.

Individual cars are also bought. This is done mainly by Ukrainians who work as drivers in transport companies operating in Lithuania. At the end of their terms, after making money, they buy cars and return home with them.

According to V. Naujanis, the most pressing problem at the moment is that travel restrictions caused by the pandemic have affected the shortage of new cars. The fact that there is a small supply on the market was also said by Lithuanians looking for newer cars.

“If a week ago we received 10 to 15 trawlers, now there are only 2 trawlers, because Belgium and Germany, where they buy the most, have introduced strict restrictions.

Everyone hopes for better times. This market is characterized by the need for cars for everyone. As soon as there are bigger launches, there is a jump after them, ”said V. Naujanis, director of the market management company Varanas.

Although cars can be purchased overseas remotely, online, Kaunas dealers avoid doing so. Kaunas residents interviewed mentioned that there is too much risk, especially when buying from an unknown seller for the first time, that the product is far from being declared.

“I have been transporting cars from Italy, I haven’t done it for a long time. Buying online is quite risky, not sure what you will get, maybe send a “doll”. I want to see and assess the condition at the site, ”said a middle-aged Kaunas resident who met at the market.