Central and Eastern European car market stalls in 2009

JATO Dynamics, the world’s leading provider of automotive data and intelligence, has observed a significant contraction in Central and Eastern European new car markets, in the first half of 2009.

All the major volume brands, with the exception of Kia, have experienced a downturn in sales, as the region, once the star of performer in European new car sales, reflects the wider economic crisis.

Regional Summary
In total, 504,641 cars were sold in CEE in the first six months of 2009. Poland remains the largest market in the region, with sales of 168,888 in the period (up 0.1% on H1 2008) representing a third of all sales, having the distinction of being one of only two markets in the region to post a YtD sales rise.

Sharing this accolade was Slovakia, which saw YtD sales rise 3.6%, to 45,728 units. All other markets suffered sales falls, with Latvia (-73.7%), Lithuania (-67.9%), Estonia (-62.4%) and Croatia (-48.6%) amongst the worst affected.

“The brakes have been well and truly applied to the racing Central and Eastern Europe new car market,” says David Di Girolamo, Head of JATO Consult. “The recent growth enjoyed in these markets has put them on a level close the Western Europe, but this growth has now been severely affected by the recession.”

Another of the markets significantly affected by the downturn is Hungary which saw a 42,390 fall in units on the same period last year. Di Girolamo continues “the stricter loan policies introduced by financial institutions and the effects of an increase in VAT (20% to 25%) from 1st July aren’t helping the market to recover. Industry experts and market analysts hoped that the scrappage schemes which have stimulated western European markets could be introduced but there is no sign on the agenda for the near future”.

Brand Performance

Skoda was the region’s top-selling car brand in the first half of 2009, ahead of Volkswagen and Ford, showing the penetration of the major Western European brands into Eastern Europe. However, all suffered losses and the only volume brand to post a rise in sales was Kia (up 3.5%, to 23,691 units in the period).

Model Performance

Skoda’s Octavia and Fabia took the top two sales spots in the first half of 2009, while the Dacia Logan saw a dramatic decline in sales (56.0%), to drop to third place by June 2009, from its top spot this time last year.

The only really strong model performance was by the Fiat Punto, which improved 19.8%, to reach 5th place in the 2009 standings (14,237 units). Kia Cee’d and Volkswagen Golf also posted sales rises, albeit more modest.

“Central and Eastern Europe remains a very distinct geographic region, in buying trends and customer tastes, but it is not immune from the effects of the global recession and is no longer the guaranteed growth area it once was”, concludes Di Girolamo.