The auto market is ready to pop in the Ukraine, the sprawling market immediately east of the expanded European Union.
To many in western Europe, the Ukraine is easy to lose among the other former satellite republics of the Soviet Union, part of a vast plain stretching to the Ural Mountains.
But todays Ukraine is different. Its huge, a larger area than any country in the EU. Its 47 million population is greater than all but four EU member states.
And they are buying new cars – 265,475 last year, up 25 percent from 2004, said data provider Ukrainian AutoConsulting. That total would make it the No. 10 market in the EU, ahead of Switzerland and Poland.
CSM Worldwide, a consulting company, forecasts annual 10 percent growth in Ukrainian new-car sales both this year and in 2007.
And now Korean automakers have discovered the Ukraine, too. Not only are they gaining in western Europe, they are establishing themselves in the East as well.
In the last quarter, two different Ukrainian automakers started knockdown assembly of Hyundai, Kia and SsangYong models.
All three major Ukrainian passenger-car builders now have ties to Koreans. A fourth smaller carmaker, Eurocar, builds Volkswagen, Skoda and Audi knockdown-kit models in southwestern Ukraine near the Slovak and Hungarian borders.
The largest local car manufacturer, ZAZ, constructed its primary assembly and engine plants as a joint venture with Daewoo. ZAZ still builds the Daewoo Lanos under license from GM Daewoo Auto and Technology, the successor to Daewoo, and has close ties to General Motors, majority owner of GM Daewoo.