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Serbia Autos Report Q1 2013
Business Monitor International, January 2013, Pages: 47
BMI has revised down slightly its Serbian vehicle sales growth forecasts for the third successive quarter,
on the back of the latest industry figures, which suggest that new vehicle demand remains sluggish, and our expectations of a slowdown in economic growth. We have revised down our forecast for Serbian real GDP growth from 0.4% to 0.2% in 2012 because of a sharp contraction in Q112. The eurozone crisis will weigh on exports and investment, while fiscal consolidation will reduce domestic demand in the second half of 2012 (H212).
We estimate sales to fall 22% in 2012, with total vehicle sales of 24,788. From 2012 to 2017, we expect vehicle sales to grow by a modest 3% year-on-year (y-o-y) on average. Again, this is slightly lower than last quarter when we pencilled in an annual average sales rise of 6% y-o-y between 2011 and 2016.
In 2012, we expect the overall consumer profile to weaken as fiscal consolidation measures come into play from H212, with the aim of bringing the fiscal deficit under control. The country's self-imposed fiscal responsibility rule and the need to comply with IMF conditions will see public spending greatly curtailed and the imposition of a freeze on public salaries and pensions, all of which will hurt the affordability of new cars.
We believe the deal between Serbia and the EU calling for a reduction in custom duties on new imported vehicles from 5% to 2.5%, which came into effect from January 1 2012, is unlikely to bolster consumer confidence and hence vehicle sales in Serbia. We believe that the weak domestic picture, constrained credit and poor export revenue from the crisis-stricken EU - its principle revenue earner - will keep consumer spending curtailed.
The country's fast-ageing population - with as much as 21.3% likely be aged over 60 by 2015 - and poor road infrastructure are unlikely to make new vehicle purchases particularly attractive to a significant section of consumers. Moreover, with vehicle loans in Serbia typically having a maturity period of up to 15 years, financing on vehicle purchases will be limited to a smaller consumer base.
Things are slightly more encouraging in terms of production, however. Owing to the small size of its autos industry, Serbia currently ranks lowest in BMI's Risk-Reward Ratings for the autos industry in Europe, but a slew of recent investments in the country's autos industry - particularly on the supply side -
pose significant upside risks to its score and ranking in our ratings system.
Executive Summary 5
SWOT Analysis 6
Serbia Autos Industry SWOT 6
Serbia Political SWOT 7
Serbia Economic SWOT 7
Serbia Business Environment SWOT 8
Global Overview 9
UK Boosts Europe, But Favourites Still Outperform 9
Table: Passenger Car Sales 8M12 9
Incentive Boom For Japan, US Powers On 9
Industry Risk/Reward Ratings 14
Poor Show From Western Europe Hurts Region's Score In BMI Ratings 14
Table: BMI Industry Risk/Reward Ratings For Autos In Europe 18
Regional Overview 19
Macroeconomic Forecast Scenario 26
Industry Forecast Scenario 28
Table: Serbian Automotive Production And Sales, 2010-2017 28
Competitive Landscape 31
Industry News 33
Government Plans All-Round Support For Struggling CV Production Segment Error! Bookmark not defined.
Company News 34
International Suppliers To Lay Groundwork For More OEM Investment 35
Company Monitor 37
Company Profiles 39
Zastava Automobile 39
Demographic Outlook 41
Table: Serbia's Population By Age Group, 1990-2020 ('000) 42
Table: Serbia's Population By Age Group, 1990-2020 (% of total) 43
Table: Serbia's Key Population Ratios, 1990-2020 44
Table: Serbia's Rural And Urban Population, 1990-2020 44
BMI Methodology 45
How We Generate Our Industry Forecasts 45