It appears as though 2013 will have proved another disappointing year for Croatian new passenger car sales, which were down by 15% as of end-October 2013, at just 24,158 units, according to figures released by local market research company Promocija Plus.
However, it appears to be a different story for light commercial vehicle (LCV) sales, which stood at 3,712 units as of end-September 2013, according to figures from Promocija Plus, cited by the CE Auto website in October 2013. On current sales trends, this would imply a total of around 4,950 LCVs sold in Croatia over 2013, which would represent growth of some 36.4% on 2012 sales figures.
Passenger car sales for the month of October 2013 were actually up by 10.0% y-o-y, at 2,194 units. This gives BMI some hope that the country may be able to stem the sales decline slightly from the 15.0% contraction as of end-October 2013. We are therefore targeting a decline of 12% for the full year, which will see new passenger car sales fall to 27,597 units.
Looking forward, BMI believes that 2014 may see something of a recovery in new vehicle sales. We are forecasting annual average growth of 5.0% in new passenger car sales over 2014-2017, with light commercial vehicle sales set to enjoy slightly stronger growth, in the order of around 8.0% per annum. However, this growth will not prove enough to offset the rapid decline of recent years and we do not envisage vehicle sales returning to anywhere near their 2008 peak over the forecast period to 2017.
To deal with the positives first, BMI's Country Risk team believes that private consumption - a key indicator of demand for new cars - will be able to add 0.6 percentage points (pp) to Croatian GDP growth in 2014, as improving consumer confidence, easing inflation and a robust tourism sector all lead to a modest recovery in disposable incomes.
Looking at recent economic indicators, retail sales recovered from a 6.7% y-o-y contraction in January, to growth of 2.6% y-o-y in August...