“Two years ago for instance, we were discussing growth of 15% of the local auto market. What really happened? Decline. Back then there was optimism in the market,” said Dana Cortina, general manager of Porsche Inter Auto, the retail division of Porsche Holding Romania that sells Volkswagen, Skoda, Seat, Audi, Porsche, Bentley and Lamborghini through its five centers.
“We talked about stagnation at the beginning of this year, and what do you see? Decline again. Now everything we want for 2014 is for it not to be worse than 2013.”
The auto market is estimated at fewer than 60,000 new cars registered in 2013, the lowest in two decades.
The steps taken this year to help the auto market included conversion of the environmental tax into environmental stamp duty and its application as of the beginning of the year to the cars registered in Romania that had not previously been subject to such a tax. This is the case of the cars registered before January 1, 2007 or in 2009 with engines below 2.0 liters or of those exempt for reasons that had to do with pollution standards.
As a result of these changes, new car registrations fell 16% to 46,700 in the first ten months and imports of used cars rose 35% to 187,000. On the other hand, the application of the tax on a segment of already registered cars, reregistrations fell by more than 40% to 171,000 this year.
“The only indicator that gives us hope now is the low motorization rate in Romania. The car tax in its current version did not help us at all this year. On the contrary. Many chose to keep their current car because the tax that the future owner would have had to pay drastically reduced its value, so they could no longer afford a new car,” Cortina said.
There are 250 cars per 1,000 inhabitants in Romania, half the European average. The local motorization rate is the lowest in the European Union, lower than even Bulgaria’s.
Under the circumstances, Porsche Inter Auto’s general manager is pinning her hopes on the premium segment in 2014, even though BMW and Audi fell by more than 20% this year, while Mercedes-Benz rose by 16%.
“The premium market will rebound much sooner than the other one, even though it was affected by what affected all of us in the business environment: the lack of certainty, the constant lack of confidence in tomorrow.”
Cortina says Porsche Inter Auto’s Audi sales rose by 10%, partly because of the opening of the new Pipera 2 center (northern Bucharest), a EUR15 million investment.
The revenue of Porsche Inter Auto is estimated at EUR131 milion for this year, down 16% on 2012, when it stood at EUR156 million, company officials say.
This year’s revenue comes from the sale of 5,300 new cars, aided by the opening of the luxury car brands center in Pipera.
“This year’s revenue went down because of the influence of the Porsche brand, which witnessed a decline, and 15 fewer cars of the brand make quite a hefty sum. We’ll end the year with flat sales compared with 2012 or 3% below because we have pending orders to be delivered in 2014.”
The next step for PIA is to become a dealer for Bentley and Lamborghini. It now has showrooms up to the standards required for the two brands, but only a sales agent for the dealer in Vienna, because of the low volumes.
Porsche Inter Auto sold four Bentleys and three Lamborghinis in Romania last year and will have delivered eight of the former and one of the latter by the end of the year.
(English version by Loredana Fratila-Cristescu)