Automakers Expect Higher New-Vehicle Sales in Eastern Europe image

Although the entire European market is affected by the economic crisis, automakers believe that the east will offer higher sales growth compared with the more mature western markets.

“It’s a very dynamic part of Europe that will see a lot of development over next few years,” said Hans Schep, Ford of Europe’s regional sales director responsible for central and eastern European markets.

One of the positive factors may be the fact that Eastern Europe has a lower car ownership, which means that when economic growth returns there will be a higher number of buyers who will swap their used cars for new models. And since the eastern countries will become wealthier, customers will choose more profitable higher value models.

In 2007-2008 when Europe was hit by the credit crisis, most countries were affected by dramatic decreases in new car sales as banks and governments reduced credits. In 2011 new-car sales were down 41% to 750,000 units from 1.3 million in 2008, in 10 important countries in eastern and central Europe. Among the most affected countries and which will see a slower recovery are Hungary with 61,000 new-car sales from 200,000 in 2007, and Romania with 168,400 units in 2011 from 367,000 in 2007.

“We predict the Romanian market will invigorate,” said Jerome Olive, head of Renault’s Romania-based Dacia brand. “The growth rate is pretty acceptable and there is only need for a little bit of growth to return to the market level it had in 2006-2007. However I think it going to take some years.”