Car market nosedives again on VAT hike

Car sales dropped by almost 40% in August against the same month of last year, the third largest monthly decline since the start of the year, amid the strong effect of the VAT increase from 19% to 24%.

In August, 6,700 cars were sold in Romania, against a little above 8,000 in July and 14,000 units in June, the first month of the past two years when the car market was in the red against the same period of 2009.
Should the trend maintain in the coming months, the second half of the year is likely to be even weaker than the first, which would determine a market volume of below 100,000 cars, considering there where a little more than 51,000 units were sold in the first half.
“(…) The only increases we’ll still see will be registered in October and November when the old car scrappage scheme ends, but even then the 10,000-car level will not be exceeded by much,” said Alin Tapalagă, general manager of Porsche Inter Auto, the retail arm of Porsche Romania, the biggest player on the market.
By September 7, almost 39,000 cars had been sold through the scrappage scheme, namely 60% of this year’s new car sales.