European Car Sales Drop

Western car markets will be concerned to see the severe decline of new car demand in Central and Eastern Europe last year, where sales dropped by almost a third, according to automotive data and intelligence provider JATO Dynamics.

All but one of the major volume brands experienced a downturn in sales for the year, 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.

(PR/GK)