Central and Eastern European consumers eschew new cars

(Skoda)

There has been a 32 percent year-on-year drop in sales of new cars in the Central and Eastern European (CEE) area, according to new data.

Although Slovakia and Poland, the region's largest market, showed a modest rise in sales, all neighboring CEE countries posted falls, some as dramatic as 73 percent. Latvia and Lithuania sold less than 2,000 new cars in the third quarter of 2009.

Eastern Europe's decline is worrying for the rest of Europe, where consumers have been encouraged by government-sponsored scrappage schemes and VAT reductions. Data released for October has shown encouraging year-on-year growth for the "Big Five" Western markets (Germany, UK, France, Italy and Spain).

"Central and Eastern Europe is worthy of attention, in representing the volatility of natural demand for new cars," commented David Di Girolamo, head of JATO Consult, which released the data November 25. "It reveals the ‘true' level of demand for new cars, when the cushioning effect of scrappage and other incentives is removed."

The biggest fall of all in Q3 was seen in Hungary, where just 9,689 units were sold, a 74.7 percent decline from 2008's figure of 38,324. Skoda remains the region's best selling brand, despite a drop in Q3 sales of almost one third (-32.7 percent) year-on-year.