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Olha Trofymova: “If there are more than three hours between air alarms, then you can work”

We bring to your attention an interview with Olha Trofymova, the head of the “Ukrainian Automotive and Mobility Cluster” (UAMC) civil association and the director of export-internationalization programs of the Ukrainian Cluster Alliance (UCA).

With Ms. Olha, we talked about how the Ukrainian automobile industry manages to remain competitive during the war; about the prospects of the domestic automobile industry; duty on imported cars; positions of the world auto giants regarding aggressor countries and cluster movement in Ukraine.

We bring to your attention an interview with Olha Trofymova, the head of the “Ukrainian Automotive and Mobility Cluster” (UAMC) civil association and the director of export-internationalization programs of the Ukrainian Cluster Alliance (UCA).

With Ms. Olha, we talked about how the Ukrainian automobile industry manages to remain competitive during the war; about the prospects of the domestic automobile industry; duty on imported cars; positions of the world auto giants regarding aggressor countries and cluster movement in Ukraine.

What are the main challenges facing the Ukrainian automotive and mobility cluster?

After almost seven months of war, I would reformat this question into the following: how did Ukrainian productions from the automobile cluster manage to survive during this period. I want to tell a lot in this part. Yes, I understand that we are under enemy’s close monitoring. Therefore, we will prepare answers to these questions with our colleagues a little later. Disclosure of information today should be balanced.

Dozens of enterprise collectives are included in the Ukrainian Automotive and Mobility Cluster. The task of the cluster is to help key people in the industry.

Therefore, our greatest value, and hence the main challenge, are people. This means gathering those who are able to be productive in difficult times, who are able to be effective leaders in times of crisis, to evacuate people, to take care of them, to instill faith in the possibility of long term working and continuing to do what they love.

The second challenge is responsibility to customers. We are talking about industry in which it is unacceptable and impossible even to delay execution of an order, not that it cannot be executed at all. This is much more than worrying about reputation. It is about keeping commitments as an opportunity to exist tomorrow.

The third challenge is destruction of logistics and supply chains. This is an overwhelming task for domestic business, solution of which is based on the international system of mutual relations. Here is an unexpected example for Ukrainians – a number of large international companies stop supplying production components (electronics) for fear that their products from Ukraine will end up in sanctioned Russia and Belarus. Adherence to sanctions is important, but just as important is adherence to limits of reasonableness. But, I repeat, we consume the consequences of changes in the international system of relations.

Is normal activity of the cluster’s productions even possible in conditions of constant air alarms? Was relocation of cluster’s productions facilities successful on an all-Ukrainian scale, or are these isolated cases?

So. Here I want to quote our partners from Israel: “If there are more than three hours between air alarms, then you can work.”

Several enterprises of our cluster relocated. Our people showed considerable mutual assistance and solidarity. That’s how it happens. One of the enterprises of the cluster hosted another. And workshop of one of our cluster members still works 5 km from war zone and continuously supplies products to other relocated workshops.

What are the competitive advantages of UAMC in the world market, do they remain in war conditions?

Yes, we are competitive. In certain high-tech niches, our enterprises were and remain highly competitive. The quality of UAMC participants’ products is confirmed by all the necessary certificates and many years of experience working with global brands. And when it comes to price competition, now the prices of Ukrainian enterprises are not even 10 times lower than in Germany, but 15. When it comes to logistics, we have certain advantages even during the war. The logistics arm from Ukraine and China allows Ukrainian automakers to compete with their Chinese counterparts.

Which auto giants remain on Russian and Belarusian markets? What is the position of Chinese and Korean car manufacturers?

The European auto industry has already left the warring countries. The active phase of discussion of this issue began during the meetings of the European Automotive Cluster Network, of which our cluster is a co-founder, back in early March.

But yes, there are other manufacturers.

At a meeting with the director of Germany Trade & Invest Hans-Jürgen Wittmann in Stuttgart, I heard that Russian market is no longer interesting because only 10% of the population has funds to buy a new car.

So, apparently, production of “cans on wheels”, as we often call Russian cars, will now be more appropriate for the aggressor country.

How are you doing with supply of imported components and export of products? Does the government support the industry businesses in these processes? What are the prospects for production that is focused on Ukrainian market?

We have now received an official letter from the ITC (International Trade Council) confirming that a member of our cluster does not work with aggressor countries. This is required for suppliers who stopped supplying products and components during the war. I am sure that together we will be able to overcome this large list of problems. There are always prospects. We are waiting for support of the automotive industry and electric mobility from the Government of Ukraine. In work.

What do you think about the government program to support machinery?

We have high hopes for it, because government purchases will be able to stimulate Ukrainian manufacturers and foreign investors to produce cars and components. Many of our clients and partners need support in form of orders. This will ensure, first of all, the preservation of the scientific and production base and human potential.

Does Ukrainian automotive and mobility cluster get anything from state military order?

You are asking a question to a representative of a country that is suffering from Russian invaders’ actions. This is closed information. We have war. We all work to win.

Does the Government fully rely only on Western aid? Is there a threat of degradation of the automotive industry?

No. I am convinced the Government of Ukraine is counting on the Ukrainian army, Ukrainian business and the Ukrainian people. European partners and friends of Ukraine understand the events taking place in Ukraine, and begin to more carefully project their consequences for the whole world. The world is much more interconnected than any of us previously thought. Likewise, all UAMC participants understand the importance of interacting with government officials, paying taxes, and saving jobs.

The duty on the import of cars was renewed, how did it affect machine builders and their contractors? What is your position on the duty?

Duty must be paid. Cluster’s position is to create barriers for import of scrap metal that does not meet any environmental standards in Ukraine. Yes, we understand the needs of those who are currently on the front lines, but we have to rebuild Ukraine. The cluster has a categorically negative attitude towards those who build business on import of used cars. I note that all our participating enterprises actively help defenders and volunteers.

What are the prospects and new opportunities of UAMC in the context of the Ukrainian Cluster Alliance?

The cluster alliance provides good expansion, positioning and networking. Monthly meetings with auto clusters in Europe and the world, started in April 2022, are ongoing, we are planning to participate in the summit of the leading suppliers of automotive equipment in Germany, and we are forming a base of knowledge and experience. We started the conversation with challenges. There is nothing more important today than people. For many business owners and managers, cluster partnership has become a key to a deeper understanding of the market, their business, and their teams. I consider it our achievement.

What are your expectations for the current year? What is your mood and plans for the future?

The mood is as follows: we believe and thank the defenders of Ukraine, businesses that strongly support the army, and volunteers. Each of us must hold our own line of defense. We continue our work on strengthening the cluster movement’s influence, help Ukrainian businesses revive economic activity, and unite like-minded people.

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