Automotive market growth to slow down following EU accession

The Romanian market might be facing a boom in second-hand car imports once Romania joins the European Union.

“I don”t think we should be too optimistic regarding the moment of accession to the European Union; we even have reasons for concern. Those most affected by the increase in the import of second-hand vehicles will be the companies operating on the low-end segment of the market, where we operate, as well,” Jean-Michel Sicre, commercial manager of Dacia-Renault told a seminar organised by Ziarul Financiar together with BRD-GSG and BRD Sogelease.

“The catastrophic comparison with the Polish market stands. In the absence of legislative measures and of proper fiscal regulations, the Romanian market runs the risk of becoming a market for the second-hand cars from the European Union,” Brent Valmar, the chairman of the Association of Automotive Manufacturers and Importers of Romania (APIA) says.

After Poland joined the European Union, all restrictions on imports of used cars were lifted. Sales of new cars on the Polish market have gradually sunk as a result, from 360,000 units in 2003 to an estimated 250,000 this year.

At the same time, sales of second-hand cars rose by 25 times from 35,000 in 2003 to 811,000 last year. Some 650,000 second-hand cars had been sold on the Polish market by the end of last month. Out of the total vehicles imported by Poland, almost 70% are cars older than 10 years, which average 120 euros in price.

“The situation in Poland was not specific to all the markets in Central and Eastern Europe after accession. For instance, the negative consequences of the import of used vehicles were not as powerful in Hungary or the Czech Republic,” the APIA chairman specified.

He noted that the associations in the industry have been looking for ways to offset these effects, after the accession to the European Union, for two years. “I don”t think we will be able to contain the access of consumers to second-hand cars, due to competition law regulations,” Valmar added.

In order to regulate the second-hand vehicle market, the APIA officials will build a catalogue of the prices of used cars in order to create a standard on the market, a measure similar to what has already been done in the West. The APIA representatives say that the prices of vehicles in this catalogue are somewhat different from the reference prices in Germany.

The local automotive market has enjoyed two years of sustained growth, with car sales growing much faster than expected by the players in this business. Sales of cars over the last three years have practically doubled and are to exceed 250,000 units this year. Sales of new cars totalled 188,000 units in the first nine months, exceeding last year”s volume. According to APIA data, this corresponds to a growth of more than 60% from the same time last year. Most manufacturers and importers of automobiles said they expected growth this year to stand at 20%. The growth rate will slow down as of next year.

“The automotive market boom will probably stop in 2008. The market will either stagnate or even decline, regardless of the situation of the imports of second-hand vehicles,” Dacia-Renault”s commercial manager said.

alexandru.cerchez@zf.ro