Ukraine’s Car Dealerships Deal with the Credit Crunch in Their Own Way.

Ukraine's entrepreneurs don't stop to demonstrate their resilience in the light of the current recession. A persistent credit crunch paralyzed the car sales in Ukraine. Moreover, hryvnia is depreciating so that fewer Ukrainians can afford the imported cars. The car sales have declined by 78% since January 2009 as compared to the previous year. While banks start showing the signs of the stabilization, the car dealerships decided to step in and offered their customers to lease a car without the third party – banks (see "Let's Put Banks Aside", Korrespondent, August 5, 2009). The car dealerships offer more flexible payment plans than the banks can offer at the present moment. Their rates are also lower than in the banks. The real estate developers quickly adopted the business model of the car dealerships. Instead of dealing with a crippled banking system, a customer can obtain a loan directly from the construction company if he decides to purchase a housing unit. The main question is: how do the car dealerships and real estate companies finance this new service?