Poland Autos Report Q1 2008

Developments in Poland's automotive industry during H207 reflect the country's increasing importance in the strategies of some of the world's leading vehicle makers. As illustrated in BMI's latest Poland Automotives Report, new car sales continued to rise during the first 10 months of 2007 despite the higher level of used car imports on the market. Moreover, vehicle production has received a boost in line with plans unveiled by industry heavyweights such as BMW and General Motors (GM).

According to data from Poland's Automotive Research Institute, SAMAR, in October 2007 new car sales hit a record 24,666 units, an increase of 8.4% on the previous month and up by 18.2% against the same month a year earlier. During the first 10 months of the year, new car sales totalled 242,058 units, up by 23.5% year-on-year (y-o-y). Market leader Toyota enjoyed a 22.8% increase in sales to 29,426 units. The Japanese carmaker was followed by Skoda, which sold 26,364 units, up by 13.3% y-o-y, and Fiat, whose sales rose by 15.2% against the prior-year period to 23,307 units. Strong economic growth and greater household wealth have fuelled new car sales in 2007, and BMI expects passenger car sales to reach 264,911 units for the year as a whole.

In BMI's view Poland's true strength as an attractive base for carmakers lies in its potential for output growth, which is in keeping with the country's score on our Business Environment Ranking. In H207 GM unveiled plans to make 240,000 units of its new generation Astra compact vehicle at its plant in Gliwice, southern Poland, from 2010. The plans are in line with a shake-up of GM's operations in Europe, which also involve production of the older Astra model being gradually phased out at its plant in Antwerp, Belgium, before being halted completely in 2010. The production level set for the Gliwice facility for the Astra model is reportedly the same as output at GM's plant in Bochum, Germany, reflecting the threat production bases in Western Europe face from cheaper Eastern European countries such as Poland. Indeed, GM is bidding to cut costs by around 30% on the next generation Astra.

In terms of fresh investment, BMW has earmarked investment of PLN30mn (EUR8.09mn) to set up a spare parts centre in Slubice, near the Polish-German border. The facility will be used by BMW to supply its dealerships in Poland and across Eastern Europe.