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Good prospects for the Polish automotive market in 2011


The closing weeks of 2010 were marked by frantic car-buying activity among entrepreneurs seeking to take advantage of favourable VAT rules that were due to be scrapped on 1 January 2011. In the case of many car brands this led to vehicle shortages at dealerships and to the absence of special promotions, which normally tend to drive car sales in Poland in the opening weeks of a new year. Therefore, car sales in January will be significantly lower than in the same period of 2010, by about 20% according to my estimates. The stagnation will probably extend into February, but its scale will be smaller, and from the second quarter onwards the market should start regaining ground. There are several reasons for my optimism. First, according to our research, the hike in sales caused by the prospect of less generous VAT rules as of 2011 was only about 8-10%; the buying spree did not extend to big companies, which pursue more stable fleet management policies and so will press on with pre-scheduled replacements in 2011. Second, the economic situation in Poland is considerably better than in most other countries, and preparations for the Euro 2012 football championships are entering their final phase. Thirdly, all brands will be fighting hard for market share. Most importers predict 2011 sales to be roughly the same as in 2010, and our budget assumptions are similar, so new-car sales of 340,000-350,000 vehicles in 2011 appear entirely realistic. It can be expected that importers will deploy a wider array of marketing techniques aimed consumers and large fleet customers. Pick-up trucks and small and medium delivery vans will be back in demand. The one-point increase in VAT will be something of a drag on sales, but in my view it will be mainly as a psychological inhibitor that will soon be discarded. This process will be supported by those importers who do offer new-year promotions, as these special offers will more than compensate for the 1-point tax increase.

Wojciech Kordalewski
President of PGD Group

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