(MENAFNEditorial)
We forecast for the slowdown in vehicle sales growth seen in 2014 to intensify in 2015 and have revised down our passenger car sales forecast for the year to growth of just 1.1% to 20583 units down from 3.8% previously. This weak performance will come as shrinking access to credit a worsening of consumer confidence and a poor macroeconomic backdrop all drag on consumer spending on cars over 2015.
Part of the longer term problem for the new vehicle market in Bulgaria is the practice of hanging on to older vehicles a practice which we believe will intensify due to lower oil prices. According to a report published in June 2014 data from the Bulgarian traffic police show that 39% of all registered vehicles are more than 20 years old. We believe this trend will continue as fuel costs fall alongside falling oil prices. Falling fuel prices will make replacing older less fuel efficient vehicles with more fuel efficient new vehicles a much less attractive option than simply keeping older vehicles. Owing to our Country Risk team's worsening macroeconomic outlook for Bulgaria we are revising down our LCV forecast for 2015. We now forecast sales to drop 0.5% over 2015 down from a forecasted 5% gain previously. As tightening credit conditions and weak consumer confidence weigh on spending our country risk forecast real GDP growth to grow by a disappointing 0.8%. All this considered we highlight that the heavy truck segment looks set to perform marginally better than LCVs. Owing to the strong correlation between heavy truck demand and construction activity we believe heavy truck sales will expand 3.0% in 2015 alongside 1.7% real growth in the construction sector.
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There is positive news in the production segment however. In August 2014 Litex Motors the local partner of China's Great Wall Motors announced an added EUR70mn investment in its Lovech factory; the only vehicle assembly plant in Bulgaria. The move will allow Litex to incorporate welding metal...
Report Table of Contents:
BMI Industry View
SWOT
Political
Economic
Business Environment
Industry Forecast
Table: Autos Total Market - Historical Data And Forecasts (2012-2018)
Sales
Production
Commercial Vehicles
Table: Commercial Vehicle Market - Historical Data And Forecasts (2012-2018)
Suppliers
Macroeconomic Forecast
Macroeconomic Forecasts
Table: Bulgaria GDP Table
Industry Risk Reward Ratings
Europe - Risk/Reward Ratings
Table: Europe Autos Risk/Reward Ratings
Company Profile
Porsche
EPIQ Electronic Assembly
Alucom
Regional Overview
Europe Overview
Global Industry Overview
Table: Passenger Car Sales May 2014 (CBUs)
Outperformers Boost European Outlook
Trucks Give North America A Lift
India Brings Relief To BRICs
Demographic Forecast
Demographic Outlook
Table: Bulgaria's Population By Age Group 1990-2020 ('000)
Table: Bulgaria's Population By Age Group 1990-2020 (% of total)
Table: Bulgaria's Key Population Ratios 1990-2020
Table: Bulgaria's Rural And Urban Population 1990-2020
Methodology
Industry Forecasts
Sector-Specific Methodology
Sources
Risk/Reward Ratings Methodology
Table: Automotive Risk/Reward Ratings Indicators And Weighting Of Indicators
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