Slowdown continues in Central and Eastern European car market

Very little in the way of recovery is apparent across the new car markets of Central and Eastern Europe, according to the latest analysis from the world’s leading provider of automotive data and intelligence, JATO Dynamics.

These markets, without the government-supported scrappage schemes that have assisted many of their western neighbours, continue to suffer the full effects of the recession.  In many, these effects are felt even more intensely, having been real centres for growth up to 2008.

The only major brand to buck the downward trend in Q3 2009 has been Fiat, while only Slovakia and Poland remain in the black when it comes to new car sales.

Regional Summary
In total, 213,086 cars were sold in CEE in Q3 2009, a 32% drop, versus the same period last year.  Poland remains the largest market in the region, with sales of 70,733 marking it as one of only two markets in the region to post a rise in sales, versus Q3 2008.  This quarter’s performance continues and strengthens Poland’s upward trend from the first half of the year.

However, Poland’s growth rate continued to be outperformed by Slovakia, which saw Q3 sales rise 8.1%. All other markets suffered falls, with Latvia (-73.9%) and Lithuania (-68.1%) selling less than 2,000 new cars in the quarter. 

“Eastern Europe is suffering far more than Western markets,” says David  Di Girolamo, Head of JATO Consult. “Of course, the worrying thing here, for Western Europe, is it reveals the ‘true’ level of demand for new cars, when the cushioning effect of scrappage and other incentives is removed.”

 The biggest faller of all in Q3 was Hungary, where new car sales virtually collapsed to just 9,689 units (Q3 2008: 38,324), a 74.7% decline.  Adding to the economic woes here are the effect of mid-year VAT increases (to 25%).

Brand Performance
Skoda remained the region’s biggest volume car brand in Q3 2009, but its sales have suffered by almost one third (-32.7%), versus Q3 2008, while a strong performance by Fiat, which reflects its recent success in western Europe, has closed the sales gap and moved the Italian carmaker ahead of Ford, Renault and Volkswagen in the region, for this sales period.

Model Performance
Traditional Eastern European brands still dominate in the region and Skoda’s Octavia and Fabia remained in the top two sales spots in Q3 2009, followed by the Dacia Logan. 

However, all of these have seen dramatic declines in sales, while sales of certain Western models, such as Volkswagen Golf, have remained far more stable.

Strong model performers were the Fiat Punto and Hyundai I30 and while the exponential growth of Q3 Punto figures represent the new ‘Classic’ model, the previous Punto had recorded a 19.8% improvement in H1, versus 2008 and this reinforces FIAT’s positive thrust on the European market place.

“Central and Eastern Europe is worthy of attention, in representing the volatility of natural demand for new cars and the contrasts between regions when it comes to consumer brand preferences”, concludes Di Girolamo.