However, the May decline is the smallest of the past three months, with the steepest one being registered in March, at 35%, to less than 6,100 cars. At the same time, this year’s three months of declines overlap the old car scrap scheme of 2011, which this time did not manage to drive the market up.
“There has been a lot of confusion generated by this year’s car scrap scheme. Secondly, it was delayed. It is very difficult to draw up a business plan under the current market conditions,” said Henrik Nenzen, managing director with Ford Romania. “We hope there will be no more disruptions in the scheme next year,” he added.
Unless the market rebounds, less than 85,000 cars are likely to be sold in Romania by yearend.
“Should sales keep up this pace until the end of the year, the market would not go beyond 85,000 cars this year, compared with 106,000 last year. Nevertheless, there is still potential for a 10% increase against last year, toward 116,000 units owing to a rebound in the second half of the year,” Nenzen said. “For this forecast, we’ve already taken into account the modification of the pollution tax, as the government said. There is demand for new cars, there are a lot of three to four year old fleets set to be replaced as the decision has already been delayed several times,” he added.
Unless the market picks up the pace in the second half, a rising number of dealers are likely to have problems, especially when it comes to repaying their loans.
Car sales dropped by 16% in the first five months from a year ago, to almost 32,700 units. On the other hand, commercial utility vehicle sales continued to rise, by almost 8%, to around 5,000 units, so that this is the segment that slowed down the slump of the overall market to 13%.