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Poland Autos Report Q1 2013
Business Monitor International, January 2013, Pages: 58
Over the first 10 months of 2012, passenger car sales in Poland increased 1.8% year-on-year (y-o-y), to 229,209 units. Despite strong sales growth earlier in the year, sales have decreased in recent months as weak consumer demand continues to impact sales. The ongoing deterioration in private consumption,
combined with the declining sales growth, has prompted us to revise our sales forecast to a 2% decline over the year. We believe that private consumption is likely to lag headline growth. Household spending growth decelerated gradually from 3.7% y-o-y in Q410 to 1.2% in Q212, despite strong headline GDP growth over the period. Retail sales data indicate that this slowdown continued into the third quarter, with the average monthly retail sales slowing to 5.3% y-o-y, from 12.9% in Q112. Falling export demand and weaker investment in 2012 has reduced nominal wage growth from a monthly average of 5.4% y-o-y in Q112 to 2.2% in Q312. Wage growth is likely to remain tepid even once the economy picks up in H213 given the slack in the labour market, with unemployment at 12.4% in September. This weak private consumption picture has impacted passenger car sales, and partly informed our sales forecast revision.
Uncertainty surrounding the eurozone is likely to reduce private investment plans over the coming months. This slowdown in fixed capital formation is already well underway, with growth decelerating from 6.0% y-o-y in Q112 to 1.3% in Q212. The slowdown in investment growth, combined with weak consumer sentiment and poor macro outlook, will also impact the manufacturing sector. We believe that this will adversely affect commercial vehicle sales, and our 2012 sales forecasts have become more bearish across these segments. Light commercial vehicle (LCV) sales declined 5.2% y-o-y over the first 10 months of 2012, to 31,264 units. BMI now forecasts a 4% decline over the year. Heavy truck sales declined 3.2% y-o-y over the first 10 months of 2012, to 13,604 units. BMI now forecasts a 2.5% decline over the year. Bus and coach sales declined 10.4% y-o-y in the first 10 months of 2012, to 1,017 units.
BMI now forecasts a 9% decline over the year.
In the first eight months of 2012, vehicle production in Poland contracted by 22% y-o-y, to 445,000 units.
BMI forecasts total vehicle production to decline 15.9% over the course of 2012. The fall can be attributed to the broader weakness in European vehicle demand (the region is Poland's largest export destination) and the underperformance of Fiat in the region. Over the course of 2012, we have become increasingly bearish on the sales outlook for many markets in the region. We do, however, remain positive about the long-term growth potential in Poland's manufacturing segment, as we believe that it will draw in investment owing to its low-cost production base and proximity to key European markets.
Poland exports nearly 90% of the vehicles it produces, most of which go to EU member countries, and it is not surprising that a combined 7.6% y-o-y contraction in car sales in the EU in the first nine months of 2012 has prompted Polish carmakers to cut back on production.
More downside to Polish production came from the dominance of Fiat, which contributes to more than 57% of the total production. Within Europe, Fiat has seen a substantial decline in sales volumes, and is making substantial operating losses in the region. In October, Fiat announced that it will cease production of its Panda model in Poland by the end of 2012. The manufacturer is to consolidate production of the Panda model at an Italian plant. As of yet, it has not been announced what will replace the model at the site.
Over the longer term, we maintain a slightly more bullish outlook for vehicle production in the country,
forecasting a return to growth in 2014 for the remainder of our 2017 forecast period. This comes on the back of a resurgence in demand in many of the larger European markets after several years of declining sales volumes. From 2014, we also expect to see a resurgence in domestic demand, which should further boost production volumes.
Executive Summary 5
SWOT Analysis 7
Poland Autos Industry SWOT 7
Poland Political SWOT Analysis 8
Poland Economic SWOT Analysis 8
Poland Business Environment SWOT Analysis 9
Global Overview 10
UK Boosts Europe, But Favourites Still Outperform 10
Table: Passenger Car Sales 8M12 10
Incentive Boom For Japan, US Powers On 10
Regional Overview 16
Industry Risk/Reward Ratings 23
Poor Show From Western Europe Hurts Region's Score In BMI Ratings 23
Table: BMI Industry Risk/Reward Ratings For Autos In Europe 26
Macroeconomic Forecast Scenario 28
Table: Poland - Economic Activity, 2011-2016 30
Industry Forecast Scenario 31
Table: Auto Sales, 2010-2017 31
Table: Auto Production, 2010-2017 33
Table: Auto Trade, 2010-2017 35
Passenger Cars - Forecasts & Analysis 37
Table: Passenger Cars, 2010-2017 37
Table: Passenger car sales by brand 38
Segment News 39
Commercial Vehicles - Forecasts & Analysis 40
Table: Auto Sales, 2010-2017 40
Table: LCV sales by brand 41
Table: Heavy truck sales by brand 42
Table: Bus and coach sales by brand 43
Motorcycles - Forecasts & Analysis 44
Table: Motorcycles, 2010-2017 44
Table: Motorcycle sales by brand 45
Segment News 47
Company Monitor 49
Company Profiles 51
Demographic Outlook 52
Table: Poland's Population By Age Group, 1990-2020 ('000) 53
Table: Poland's Population By Age Group, 1990-2020 (% of total) 54
Table: Poland's Key Population Ratios, 1990-2020 55
Table: Poland's Rural And Urban Population, 1990-2020 55
BMI Methodology 56
How We Generate Our Forecasting Model 56