|
|
Estonia Autos Report 2010Published by: Business Monitor International Published: Nov. 10, 2009 - 42 Pages Table of Contents
AbstractThe Estonian automotive market has been badly hit by the international financial crisis and domesticeconomic recession, with sales down 24.8% in 2008 and a further 32.4% fall forecast in 2009, accordingto BMI’s latest Estonia Automotives Report.The slump in consumer confidence turned Estonia from being one of the EU’s fastest-growing markets toone of its worst performers. Growth was reliant on strong wage increases and rising consumer credit, witharound 80% of new car purchases made through loans, and a sharp decrease in wage levels andcontraction in credit availability knocked out these foundations. Estonia is facing its worst recession since1992, with real GDP growth forecast to come in at -8.8% in 2009 and private consumption down 8.0%. Arecovery is not expected until 2011, when GDP growth is set to rise to 4-5%. BMI forecasts automotivesales of 19,656 units in 2009 with a similar rate of decline between the passenger car and commercialvehicle segments. While we expect a return to positive growth in 2010, we caution that the rate of expansion will be amoribund 0.7%. Furthermore, the average annual growth rate for 2011-2013 is forecast to come in at just3.5%, well below the 8.1% average seen in 2003-2007. Consequently, BMI does not envisage a return tothe pre-recessionary levels, with sales reaching 25,975 units by 2013 - still 10.8% below 2008 figures and30.7% below the market’s peak of 2007. Estonia has the largest automotive component industry in the Baltics, with local safety equipment andaccessories manufacturer Norma leading the sector. However, it has been badly affected by economicrecession and the decline in both the EU and Russian autos markets. Amid falling Russian and WestEuropean sales, Norma halted production temporarily in February and March. In Q408, consolidated netsales fell 14.9% year-on-year (y-o-y) to EEK314mn. Sales to Russian and Ukrainian customers decreasedby 4.0% while sales to clients in other markets fell 25.4%. In terms of the manufacturers operating in the market, Toyota Motor and Honda Motor maintained theirposition as the two biggest players in 2008 with sales of 3,100 and 3,020 units, respectively. Whereascarmakers such as Nissan Motor, Skoda Auto, Subaru and Fiat made substantial gains in terms ofsales, the likes of Opel, Renault and Peugeot saw a substantial fall in sales during the year. Meanwhile,British luxury manufacturer Jaguar Cars sold 33% more vehicles in the period thanks to its 2008-launched XF model. However, Jaguar’s success was offset by a 54% y-o-y drop in sales for its sisterconcern, Land Rover. Amid the collapse in sales, BMI expects a radical consolidation of Estonian cardealerships in 2009 and beyond, and dealers are expecting narrow margins and low profitability. Despiteincreased market competitiveness and more flexible pricing, unless consumers can access credit and ifthere is little confidence to spend they will not buy cars. Mergers and acquisitions (M&A) activity iswidely expected. In 2008, the Baltic states saw commercial vehicle sales fall 32.3% to 15,730 units, totalling aroundEUR935mn. The collapse in the market reversed gains made in the previous year and ended a period ofhigh post-accession growth. Estonia’s market is heavily skewed towards light commercial vehicles(LCVs), which represent two-thirds of total commercial sales. The Estonian haulage sector is underpressure and growth in truck orders has been markedly slower than in other Baltic states. Past Estonianheavy commercial vehicle (HCV) sales growth has been sustained through low taxes and low prices,which has encouraged growth in foreign purchases. But the steady convergence of markets and theintegration of local dealers into larger regional distribution networks has eaten away at Estonia’scompetitive advantage over neighbouring states. Get Full Details About This Report >> |
|
|||
|
About MarketResearch.com
|
||||