Frost & Sullivan: While CEE Car Markets Remain Volatile, Russia Takes the Tough Road to Recovery

LONDON, May 24 /PRNewswire/ -- As expected, the European car market has been losing steam as cash-for-clunkers scrappage schemes wind down. Both Germany and Italy, which together generated 37 per cent of European car sales in April 2010, saw sales fall by 32 per cent and 16 per cent respectively compared to April 2009.  Although the total European new car market contracted by 7.4 per cent compared to last year, it grew by 4.8 per cent between January-April. Frost & Sullivan estimates that although 4-month YTD figures in Europe remain positive (+4.8 per cent), April numbers may be pointing to the beginning of a negative trend for 2010, especially with scrappage schemes ending in large markets like France and Spain.

(Logo:  http://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO)

At the same time, the Russian economy is looking up, luring people back to the showrooms. "The 20 per cent jump in April is just what the Russian automotive industry needed after a depressing 2009," argues Frost & Sullivan Research Analyst, Vitaly Belskiy. "However, it is too early to be overly optimistic.  April 2009 figures were down by 53 per cent down compared to 2008. In other words, the Russian light vehicle market is still leagues away from its potential– precisely, 44 per cent away (April 2010 to April 2008)."

Scrappage schemes successfully bolstered the auto industry throughout Europe, and, even though they were introduced late and not properly coordinated in Russia, they are working there too. The big question now is what happens when government funds dry up. To some extent, the Russian car market will have to contend with the problems of Germany and Italy.  If demand meets incentive funds, cars sold through the incentive will account for roughly 13 per cent of the market.

"The light vehicle market in Russia will likely gain momentum later this year, reaching up to 1.6 million units, as the economy and consumer confidence improve," states Belskiy. "Nevertheless, slumping European car sales, even in relatively strong CEE countries like Poland, indicate that new car markets remain highly volatile everywhere."

For more information on this subject, or if you would like to speak with the author, please e-mail Monika Kwiecinska, Corporate Communications, at [email protected], with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.  

Electric Vehicles Unplugged 2010: taking place at the House of Lords and at the Society of Motor Manufacturers & Traders in London on June 22 - 23, will bring together key decision makers including Government, OEMs, Supplier Infrastructure companies and Major Fleet Managers, to provide insights into the structure of new business models and their implications for industry stakeholders. This unique workshop will also allow attendees to understand the position that key industry players are taking towards infrastructure and to debate the pros and cons of different solutions in development across Europe. If you are interested in joining us at this event, whether as a sponsor or an attendee, please contact Monika Kwiecinska, Corporate Communications for Frost & Sullivan in Europe, at [email protected]. For more information you can also visit http://www.frost.com/evw2010

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

SOURCE Frost & Sullivan