Recently published research from Business Monitor International, "Bulgaria Autos Report Q1 2013", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 01/15/2013 -- In February 2012, Great Wall Motors, a Chinese firm, opened its first European production facility - the first in Europe to produce a Chinese car. The factory is located near the northern Bulgarian village of Bahovitsa, and is operated by Great Wall in partnership with Litex Motors, a Bulgarian firm. The facility has a maximum production of 50,000 vehicles, covers 430,000 square metres, and will eventually employ some 2,000 workers. As the site currently only has around 120 staff, BMI forecasts that Bulgaria will produce 2,000 vehicles in 2012. We believe this will increase to 20,000 units in 2013, 35,000 units in 2014, before Great Wall's plant reaching full capacity by 2015.
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As our Bulgarian forecasts are based on the fortunes of one company, not several companies operating in one country, there are some downside risks to our forecasts, but we believe that these forecasts are realistic. For now, we believe that other manufacturers will be hesitant to invest in the country, but may do so over the longer term. This would provide upside risk to our forecasts.
Sales in Bulgaria's auto market continue to be dominated by second-hand vehicles, as the country's economy languishes with much of the region. New passenger car sales in Bulgaria declined 0.7% yearon- year (y-o-y) over the first nine months of 2012, to 14,252 units. BMI forecasts a 1% fall in this segment in 2012, predicated on our bearish outlook for private consumption growth in the country. Unemployment remains high, climbing inflation continues to erode consumers' purchasing power, and retail sales remain weak. Further, household lending has contracted in 2012. Indeed, we expect consumption growth to remain weak over the remainder of the year. This weak consumer story has partly informed our bearish sales forecast revision.
New passenger car sales in Bulgaria have declined considerably from 2008 levels, when sales hit 43,000 units. Sales have remained relatively weak since then, and we do not see the market reaching these levels again within our 2017 forecast period owing to continued weakness in private consumption.
Sales of used cars increased by between 10% and 20% over the first six months of 2012, according to Bulgaria's Association of Importers of Automobiles, which suggested that the spike in used car sales likely came as consumers eschewed leasing for new vehicles amid a relatively weak economic outlook. The most popular used units are those priced up to BGN20,000 (US$12,629) and between three and seven years old.
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