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Viewing report
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Bulgarian Automotive Market: Passenger Cars, Suppliers and Aftermarket 2007-2010
Globis GmbH, April 2008, Pages: 90
This Globis report, Bulgarian Automotive Market: Passenger Cars, Suppliers and Aftermarket 2007-2010, provides a comprehensive analysis of the Bulgarian car market. Bulgaria is, with a population of 7.7 million, a medium market in Central and Eastern Europe (“CEE”). GDP per capita in 2007 was 3.747 EUR and average income was at 217 EUR per month, making Bulgaria one of the poorer countries in CEE. However, with around 5% GDP growth rate at constant prices, Bulgaria's economy is growing faster than that of most other European countries. In addition, there is a substantial grey economy in Bulgaria.
Bulgaria’s car penetration is one of the highest in CEE and just about 20% lower than for example in France. While the park was growing at about 10% annually over the last years, growth will reduce to about 3%. The car park today is relatively old. Bulgarians, however, will start replacing very old cars through newer ones.
Since Bulgaria became a member of the EU in 2007, imports of used cars increased dramatically. The imports reached an all time high in 2007, mainly consisting of relatively old and hence very cheap cars.
Notwithstanding this rapid increase, the new car market is also growing continuously. During recent years the market grew at a rate of almost 30% annually. We expect this rate to reduce but still estimate 18% growth over the next years annually.
Toyota took the lead in the new cars market, whereas the most popular models sold are the Dacia Logan and the Opel Astra. Most brands are represented by a wide dealership network, mostly owned by one local company. For many brands there is room for growing the dealer network.
The majority of new cars purchased are financed through financial leasing arrangements. Loans play a minor role in new car purchase and a somewhat bigger role in the used car market.
Currently, no OEM is manufacturing in Bulgaria. Bulgaria traditionally did not play any role in car production, although Rover did assemble cars on the basis of CDK kits for some years and a local industrial conglomerate is currently considering the production of a new local brand. This is in line with Bulgaria trying to attract FDI, also in the automotive sector. With no cars manufactured, there are only few players in the parts industry in Bulgaria.
The Bulgarian aftermarket is strongly influenced by the huge number of second-hand imported cars. These cars need service – and the service network in Bulgaria currently is not sufficiently organized to provide this service. Most Bulgarians are price sensitive and hence choose IAM parts or fakes. Fakes are an issue, especially for maintenance and minor repairs. Also, used and somehow refurbished parts are an issue.
Alongside with the car park, the Bulgarian aftermarket (spare parts) will be growing at a rate of 3.5% until 2010, outperforming the growth of the car park. The distribution system for spare parts to the consumer is still developing, alongside with the system for car service.
In total, the Bulgarian market for passenger cars and spare parts is quite attractive. The new car market will continue to grow and the aftermarket will become more professional in the course of the next years. The main challenge will be to provide attractive financing conditions for Bulgarians with low income. In the aftermarket, distribution of spare parts is the main issue to resolve.
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