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Greece Autos Report Q3
- Product Code:BMI02436
- Publication Date:June 2011
- Publisher:Business Monitor
- Product Type: Report
Vehicle sales data for the first four months of 2011 have shown that Greek consumers have given a cold response to the vehicle scrappage scheme introduced by the government on February 21 2011. The European Automobile Manufacturers' Association (ACEA) estimates that passenger car sales in Greece fell nearly 51% y-o-y, to 35,458 units, in the first four months of this year, while commercial vehicle sales were down nearly 53.4% y-o-y, to 2,604 units, in the same period. The results testify BMI's expectations of the scheme proving to be ineffective owing to Greece's high level of taxation on the purchase of new cars and high ownership costs.
Meanwhile, the Greek economy contracted a hefty 4.8% in the first quarter of 2011 compared with the same period a year earlier, prompting us to expect the depression to continue throughout the year.
We have therefore revised down our previous car sales forecast this year. Weakening business confidence will mean that sales of commercial vehicles will fall at least 7% y-o-y in 2011. The net result will be a close to 6.3% y-o-y drop, to just over 146,000 units, by the end of the year. Although vehicle sales growth is expected to enter positive growth territory from 2012, overall recovery will be modest, reaching only 168,600 units by the end of 2015.
This lacklustre performance combined with the lack of domestic auto automotive manufacturing will mean that Greece will continue to be a significant underperformer in Europe. Placed at the bottom in BMI's Risk/Reward Ratings for the auto industry in Europe, Greece not only suffers from poor scores in the auto market, but also in terms of its country risk score.
There are, however, opportunities for Greece to improve this score if the government repealed some the regulations on the industry, thereby speeding up recovery in the market. The government, however, will be reluctant to carry out such measures because of the high levels of air pollution in the country's urban areas. An environment tax was introduced by the Socialist government for 2010, resulting in annual road tax of between 25% and 75%, depending on the age of the vehicle and the size of its engine. BMI research shows that the policy favours new car owners, who are likely to face a fall in their road tax by 4- 39% compared with 2009 levels. Meanwhile, taxes for older vehicles and those with bigger engines could see as much as 75% increase in their taxes in 2010.
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- Table: Greece - Circulating Vehicles By Category,
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- Table: Greece - Top 10 Players In The Light Commercial Vehicle Segment*, 2008-
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