Appreciation of the domestic currency, end-of-year promotions and remittances by Romanians working abroad all caused the vehicle market in Romania to boom, with sales reaching nearly 15,000 units and worth more than 150 million euros. This is a 90% increase on the same month in 2004, the best year for the automotive market to date.
The boom is even more surprising considering that the analysts' estimates pointed to a mere 10% growth for 2005.
The Romanian automotive market is following an already predictable pattern: sales begin slowly in January, then pick up gradually month by month before reaching a peak in July; this is followed by a decline in August and maybe September; while the last three months of the year see sales rise again.
This rule was broken this year when vehicle sales went through the roof across the board, not just for Logans, but for other Romanian and imported vehicles as well. For cars, sales even doubled in the first month of the year, compared with the corresponding period last year, reaching 12,500 units.
"The automotive market has a cyclic performance. Last year it hit a record high of 180,000 units sold, which represented significant growth on the previous year (over 33%), and this trend has been maintained for the beginning of this year," says Constantin Stroe, vice-chairman of Automobile Dacia, the leading domestic manufacturer.
Analysts say what happened in January was due to a number of factors acting in concert.
"The car stock in Romania is obsolete, which makes for a strong need of new cars," says Mr Stroe.
The improvements to financing terms have enabled this need to be satisfied.
"Dwindling interest rates made funding, leasing and credit systems increasingly advantageous for potential clients," said Brent Valmar, chairman of the Association of Automotive Manufacturers and Importers of Romania (APIA) and chief executive of the leading importer on the domestic market, Porsche Romania.
The appreciation of the domestic currency against the euro also led to increased interest in vehicles, analysts believe. The development of EUR/ROL exchange rate acted as a trigger in purchasing decisions by clients that had preferred to wait until that moment.
There was also the matter of potential benefits from the introduction of the flat-rate tax that made some clients opt for a loan or the leasing system, market players say. It remains to be seen if this correlates with data on the development of consumer credit in December of last year and January of this year.
The almost 90% growth in the sales also has an artificial side to it, importers say, due to its actually being an extension of the better than expected performance in November and December.
"Many orders were taken after the end-of-year promotional campaign, with deliveries left to be made in January and February of the next year," says Nicolas Ianculescu, general manager of Renault Nissan Romania, the importer of Renault and Nissan in Romania. ionut.bonoiu@zf.ro
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