Automotive News - November 17, 2008 - (Page 26b) 26B • NOVEMBER 17, 2008 Once-robust eastern Europe braces for sales slump John Revill jrevill@craincom.de Going down One prediction: New-car sales in eastern Europe, excluding Russia, could fall 500,000 units in the next 3 years. SALES ESTIMATE Is the auto boom over for central and eastern Europe? With the International Monetary Fund leading a $25 billion rescue deal for Hungary, auto executives and analysts fear other former communist countries will follow as growth slumps across the previously fastgrowing region. “This area used to be a growth area, but not anymore,” said Carl-Peter Forster, president of General Motors Europe. Eastern Europe is highly dependent on western Europe, Forster says. 2008: 2009: 2010: 2011: 2.9 million 2.5 million 2.3 million 2.4 million Four factors are behind an expected 2009 slowdown in new-car sales across eastern Europe: 1. Tightening available credit. 2. Shrinking consumer confidence. 3. Falling corporate spending on car fleets. 4. Rising used-car imports from western Europe. Spreading pain Although sales in markets such as the Czech Republic and Poland have improved this year, they are now slowing. This has affected 2009 forecasts. Analyst Goldman Sachs says newcar sales in eastern Europe, exclud- Source: Goldman Sachs “I wouldn’t expect them to be able to decouple themselves from a more difficult situation in Europe,” he told Automotive News Europe. ing Russia, could fall to 2.3 million cars in 2010, from 2.9 million cars this year. PricewaterhouseCoopers also believes that the growth is over for now. “In the best case, 2009 sales will be flat, but being realistic, there will be a small decrease,” said Peter Green, partner for assurance and advisory at the company’s Warsaw, Poland, office. Green cited the credit squeeze and falling fleet sales as key factors. Across countries and carmakers, there are many signs that the industry’s tough times are expanding eastward in Europe. Dealers in the Czech GM Europe’s Carl-Peter Forster expects western Europe’s woes to spread to eastern Europe. Republic still expect 2008 sales to be up 10 percent. But next year will be static at best, they say. Renault’s Romanian subsidiary Dacia has sold more cars this year than last in Poland, Bulgaria, the Czech Republic and Slovakia, but sales are down in Slovenia, Hungary and Romania. Overall, Romania’s Dacia is holding up well on the strength of its Logan budget car range. Sales hold up at Renault Gilles Messier, general manager of Renault Retail Group, said the French automaker’s companyowned distribution operations in eastern and central Europe seem to be doing better than those in western Europe. “For the moment, the volumes are still progressing, and the markets remain profitable,” said Messier, whose company’s operations are mainly in the Czech Republic and Poland. General Motors also has had a good 2008 so far. Sales is eastern Europe have grown 5.6 percent this year. But next year, GM expects the market to fall up to 10 percent. “Next year we have to be realistic in what we are expecting,” said Chris Lacey, GM’s executive director for central and eastern Europe. “It is going to be tough and challenging.” Lacey cited rising used-car imports, especially in Romania, as a factor. Hungary will suffer from a recent increase in interest rates. “Consumer credit is tightening up across the region,” he said. East is more volatile The relative immaturity of eastern European markets makes them more susceptible to economic ups and downs, said Peter Fleet, regional director of European sales operations for Ford of Europe. That could also be an advantage, Fleet said. “Just as these markets are hit more quickly, it may be that they recover more quickly,” he said. Analysts believe rising incomes and low car ownership meant the market would recover. Many automakers are also looking to the East for its longterm potential as well as current sales. “They are important in terms of profits now, but they are going to be an increasingly important part of Ford’s profitability growth plan going forward,” Fleet said. “They are going to be very important for anyone who wants to be successful in the automotive business.” c Lyle Frink and Lawrence J. Speer contributed to this report pla nt ion for yours. Kno ocat xvil al l leOa ide e kR h st id i ge I essee. enn y, T lle Va ion at ov nn Just ov er W’s rom V mf 0k 10 ne w www.InnovationValleyInc.org/automotive http://www.InnovationValleyInc.org/automotive http://www.InnovationValleyInc.org/automotive
Table of Contents Feed for the Digital Edition of Automotive News - November 17, 2008 Automotive News - November 17, 2008 Automotive News - November 17, 2008 - (Page Intro) Automotive News - November 17, 2008 - (Page BB1) Automotive News - November 17, 2008 - (Page BB2) Automotive News - November 17, 2008 - (Page 1) Automotive News - November 17, 2008 - (Page 2) Automotive News - November 17, 2008 - (Page 3) Automotive News - November 17, 2008 - (Page 4) Automotive News - November 17, 2008 - (Page 5) Automotive News - November 17, 2008 - (Page 6) Automotive News - November 17, 2008 - (Page 7) Automotive News - November 17, 2008 - (Page 8) Automotive News - November 17, 2008 - (Page 9) Automotive News - November 17, 2008 - (Page 10) Automotive News - November 17, 2008 - (Page 11) Automotive News - November 17, 2008 - (Page 12) Automotive News - November 17, 2008 - (Page 13) Automotive News - November 17, 2008 - (Page 14) Automotive News - November 17, 2008 - (Page 14a) Automotive News - November 17, 2008 - (Page 14b) Automotive News - November 17, 2008 - (Page 15) Automotive News - November 17, 2008 - (Page 16) Automotive News - November 17, 2008 - (Page 17) Automotive News - November 17, 2008 - (Page 18) Automotive News - November 17, 2008 - (Page 19) Automotive News - November 17, 2008 - (Page 20) Automotive News - November 17, 2008 - (Page 21) Automotive News - November 17, 2008 - (Page 22) Automotive News - November 17, 2008 - (Page 23) Automotive News - November 17, 2008 - (Page 24) Automotive News - November 17, 2008 - (Page 25) Automotive News - November 17, 2008 - (Page 26) Automotive News - November 17, 2008 - (Page 26a) Automotive News - November 17, 2008 - (Page 26b) Automotive News - November 17, 2008 - (Page 27) Automotive News - November 17, 2008 - (Page 28) Automotive News - November 17, 2008 - (Page 29) Automotive News - November 17, 2008 - (Page 30) Automotive News - November 17, 2008 - (Page 31) Automotive News - November 17, 2008 - (Page 32) Automotive News - November 17, 2008 - (Page 33) Automotive News - November 17, 2008 - (Page 34) Automotive News - November 17, 2008 - (Page 35) Automotive News - November 17, 2008 - (Page 36) Automotive News - November 17, 2008 - (Page 37) Automotive News - November 17, 2008 - (Page 38) Automotive News - November 17, 2008 - (Page 39) Automotive News - November 17, 2008 - (Page 40)
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