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CEE markets provide warning to West

By / 12 years ago / Latest News / No Comments

As the regional effects of the wider economic crisis were compounded by rising taxes and a lack of Western-style incentive schemes, less than one million cars were sold in CEE in 2009, a 28.1% decline compared with 2008.

The effects of recession were felt across the region, with only Poland ending the year with flat sales (+0.1% vs. 2008).

Many markets suffered double digit sales falls, with Latvia (-72.9%), Lithuania (-66.2%), Estonia (-59.6%) and Hungary (-60%) amongst the worst affected.

The picture is very different from two years ago, when the CEE region was considered the engine of growth in European new car sales.

'Central and Eastern Europe is not the new car market it once was," said David Di Girolamo, Head of JATO Consult. 'The lack of any formal incentive schemes, coupled with rising taxes and more stringent banking requirements has reduced consumer demand across the region.

'This of course is something watched closely by Western markets whose own national incentive schemes come to an end in 2010,' he added.

Skoda remained the region's top-selling car brand in 2009, ahead of Volkswagen and Ford, showing the past efforts of major Western manufacturers to enter the Eastern European region.

Skoda's Octavia and Fabia took the top two sales spots in 2009, while the Dacia Logan saw its sales halve (-51.5%), in its drop to third place.

Aside from new market entrants and refreshed models, the picture for models was almost universally bleak, with even the Volkswagen Golf – Europe's best-selling car – posting a 5% sales decline. The key exceptions were models assembled locally – the Hyundai I30 in the Czech Republic and the Fiat Punto Classic in Serbia.

'Our assessment of new car sales in Central and Eastern Europe makes clear the severity of the recession without the cushion of incentive schemes and should be a warning to Western markets. It remains to be seen whether the region will recover to the growth rates enjoyed here previously,' concluded Mr Di Girolamo.

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