|
|
 |
|
Viewing report
|
|
|
|
Latvia Autos Report 2012
Business Monitor International, Nov 2011, Pages: 44
Business Monitor International's Latvia Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Latvia's automotive industry.
In 2010, 4,976 new cars were sold in Latvia, according to data from the Latvian Authorized Automobile Dealers Association (LAADA). This represented a 32.9% increase on the 3,745 new cars that were sold in 2009 and reflected BMI’s view that Latvian autos sales were set to bounce back over 2010. There were also 1,076 commercial vehicles sold over the year, an increase of 48.4% year on year (y-o-y), plus 137 buses (up 95.7%). This made for a total of 6,189 new vehicles sold in Latvia during 2010.
Looking at trends so far in 2011, a total of 6,191 new cars were registered over the first nine months of the year, an increase of 76.8% y-o-y, according to LAADA data quoted in the Baltic Course magazine in October 2011. September saw a total of 764 new registrations, second only to May during the current calendar year, which saw 774 registrations. In addition to 6,191 new car sales over January-September 2011, there have also reportedly been 1,838 commercial vehicle sales, which makes for a total of 8,029 new vehicles sold over the first nine months of 2011. This positive nine-month performance bodes well for BMI’s target of 10,140 new vehicles sales in 2011 being met, with perhaps some upside risk to this figure.
German carmaker Volkswagen (VW) is now the market leader in the passenger car segment in Latvia, with 1,025 new car sales over the January-September period for a market share of 23.7%, according to LAADA. The former market leader Toyota Motor (742 new vehicle sales, for a share of 11.1%) now lies in second place. Toyota is followed by Skoda Auto (342, 5.5%), Peugeot (336, 5.4%) and Nissan Motor (330, 5.%) to round out the Top 5.
The most popular type of new car registered in Latvia over 2011 has been sports utility vehicles (or SUVs). The top-sellers in this category were the Nissan Juke (150), Nissan Qashqai (131), Toyota RAV4 (127) and Toyota Land Cruiser (119), according to the Baltic Course report.
Looking forward, there are reasons to be optimistic for continued growth in new vehicle sales in Latvia beyond the current year. For one, economic growth is returning strongly, with the Finance Ministry increasing its 2011 GDP growth forecast to 4.5%, from 3.3%. The economy expanded by 5.6% in Q211, representing the quickest growth in the past three and half years, with tax revenues also buoyant. Although global factors may see the rate of economic expansion decline slightly in 2012, BMI's core forecast is for continued steady growth across the forecast period to 2016.
Inflation is also set to moderate from an average of 4.2% in 2011 to an average of 3.5% in 2012, according to BMI's macroeconomic team. This should give scope for more attractive new car financing deals, which could also boost demand for new cars over the forecast period.
Against this backdrop, BMI is currently forecasting an impressive 80% growth in new vehicle sales in Latvia over the 2011-2016 period, which would take total new vehicle sales to 18,306 units. Passenger cars will make up the majority of this total, with BMI targeting new car sales of 14,541 units in 2016 (or nearly 80% of all new vehicles sold). Commercial vehicle sales will also increase, at an even faster rate of 206.3% over the forecast period, to reach new CV sales of 3,765 units in 2016.
Opportunities for automakers, but challenges remain In a September 2011 interview with the Baltic News Network, LAADA President Andris Kulbergs outlined some of the opportunities and challenges presented by the Latvian autos sector at the present time. One opportunity for automakers is the fact that Latvia has the oldest national fleet in the EU, with the average age of a car passing technical inspection currently standing at 12.5 years, according to Kulbergs. This compares to 7 years for the EU as a whole and 8.5 years for neighbouring Estonia.
Clearly, there are opportunities for automakers as Latvians seek to replace ageing vehicles. Kulbergs believes that autos leasing will play an important role in driving growth in Latvian new car sales, a view BMI shares. Leasing companies accounted for 62% of financing for new cars in August, according to Kulbergs.
On the negative side, Kulbergs identified a lack of skilled mechanics as an obstacle for the domestic industry, which impacts on the autos repair and servicing industries. Kulbergs also identifies high taxes as a further challenge, with a Latvian having to pay LVL360 in taxes and duties when registering a new car, compared to just LVL15 (equivalent) in Lithuania, which is 24 times less. This also has potential negative implications for the state, as people may choose to buy cars in neighbouring countries where registration costs are lower.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
