Although the Greek economy outperformed the eurozone's -4.1% y-o-y growth in 2009, BMI forecasts a reversal in 2010, with the Greek economy expected to shrink 2% y-o-y compared with the tepid regional growth of 0.9% y-o-y. Key to this will be the squeeze in public spending and tax rises, which we expect will affect consumer demand in the short and medium term.
Estimates from the Association of Motor Vehicle Importers Representatives (AMVIR) reveal the market shifted 71,813 units in the four months of this year, down a massive 48.1% compared with the same period last year. With households already struggling to make payments on debts, rising unemployment and government job cuts will fall heavily on the affordability of new cars, leading to a further 16-17% yo- y fall in vehicle sales, to 194,700 units, by the end of the year.
Much of the damage is also likely to come from the new regulations on car purchases. The government has raised standard VAT from 21% to 23% and increased the special luxury tax on new passenger cars. We forecast real GDP growth of 0.3% in 2010, rising to 0.9% in 2011and then to 1.6% in 2012 and 2013. The outlook beyond this is extremely murky, as it will depend on the success of current crisis management policies, but we anticipate a gradual return to a lower long-term growth trend at around 2.5% annually. Given the present situation, we view the risks to this baseline scenario as weighted heavily to the downside.
Auto growth in the longer term is therefore likely to be slow, averaging 3-4% y-o-y between 2012 and 2014. Nevertheless, this growth will not be strong enough to take the market to the pre-crisis level of 303,000 units.
Greece stands second from last in BMI's ratings Business Environment Ratings for the auto industry in Europe owing to the lack of any local manufacturing facility and its industry's relatively small size. In view of our forecasts, we see a risk that Greece may lose more points and drop to last position in the near future.
Small vehicles became popular in 2009 and Greece's competitive landscape is increasingly dominated by firms that make small cars. Volkswagen (VW), Ford Motor, Suzuki Motor and Nissan Motor have outperformed the market, despite selling fewer vehicles compared with 2008. Market leader Toyota Motor's market share fell from 9.9% in 2008 to close to 9.5% by the end of 2009 with its sales largely underperforming the overall 17.5% contraction in the market. VW and Opel occupied second and third positions with respective sales of 18,745 (a fall of 11% y-o-y) and 17,245 (a 17.3% decline).
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Report Table of Contents:
SWOT Analysis
- Greece Auto SWOT
- Greece Political SWOT
- Greece Economic SWOT
- Greece Business Environment SWOT
Business Environment Ratings
- Table: Western, Central And Eastern Europe Business Environment Ratings
Industry Developments - Western Europe
- Cross-Continental Tie-Ups Pick Up Pace
- Table: Japanese Carmakers Capital Tie-Ups
- European Suppliers In Global Rankings
- Table: Europe - Top Auto Suppliers (US$mn)
- Greek Crisis Will Make European Auto Recovery More Difficult
Market Overview
- Table: Greece - Circulating Vehicles By Category, 2007
- Industry Developments
- Greece: Revised Taxes On Vehicle Purchases, 2010
- Table: Greece Road Tax Revision, 2009
Industry Forecast Scenario
- Table: Greece Passenger Car Sales - Historical Data And Forecasts
- Macroeconomic Forecast Scenario
- Table: Greece - Economic Activity
Competitive Landscape
- Table: Greece - Top 10 Players In The Passenger Car Segment, 2008-09
- Table: Greece - Passenger Car Sales By Segment
- Table: Greece - Top 10 Best-Selling Small Cars (Segment C), 2009
- Table: Greece - Top 10 Players In The Light Commercial Vehicle Segment, 2009
Company Monitor
- Toyota Hellas
BMI Methodology
- How We Generate Our Forecasting Model
- Sources
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