European Automakers See Central Europe as the Future

It is not a revelation to say that the European market is struggling. FordFordUnited States of America, 1903 > present92 models
2522 photos
11 videos
thinks that it will lose over $1 billion in the region this year, and when automakers announced their earnings at the end of July, VolkswagenVolkswagenGermany, 1938 > present98 models
9654 photos
31 videos
is the only company that made money there. There might be one exception to the failing Europe, though - Central Europe. While the region took the hardest hit during the credit crunch of 2007 and 2008, it is also recovering the fastest. In the last quarter, it was up 10%.

Part of the rebound is caused by the low car ownership rate in Central Europe. The EU average is 470 cars per 1,000 people. In Romania, there are 200 cars per 1000 people, and in Slovakia and Hungary there are 300 cars per 1000 people. The rebound is also pushed by the fact that cars tend to be older in Central Europe. The EU average car is 8.3 years old, but in Poland and Slovakia the average car is 11 years old. 

Both of these factors mean that as the market improves, people living in the region are more likely to buy a new car

Car sales in Central Europe that fallen significantly since 2008. In 2008, sales in the region were from 1.3 million cars to 750,000 last year, a 41% drop. 

Some markets will take longer to recover than others. Hungarian auto sales have fallen from 200,000 cars in 2007 to 61,000 last year. 

However, Romania is recovering more quickly. Sales have fallen from 367,000 in 2007 to 168,400 in 2011. Dacia predicts that sales will return to 2007 by next year. 

German cars lead in the region because of their image and quality. The Skoda OctaviaSkoda Octavia (Modern) Gen.2Czech Rep., 2004 > 2012249 versions
353 photos
and Volkswagen GolfVolkswagen Golf Gen.6 [Mk6 - A6/Typ 5K]Germany, 2009 > 2012249 versions
747 photos
3 videos
are the top selling models in the region. 

Source: Automotive News Europe