Boston, MA -- (SBWIRE) -- 04/10/2014 -- Light vehicle production in the Czech Republic increased 4.1% in 2013, to 1,128,473 units. This follows a surge in Q413 on the back of a marked improvement in the European market, the country's main export destination. BMI expects this positive momentum to continue into 2014, and for sales across Europe to return to positive territory. This has informed our forecast for a 2.1% increase in passenger car production over the year.
In the first nine months of 2013, output declined 7.2% year-on-year (y-o-y), to 834,198 units, and we forecasted a 5% decline over the year- we expected to see a modest uptick in line with our view that the European market would improve somewhat in the final quarter. Passenger car sales in Europe (EU-27) declined 1.7% in 2013- this represents a marked improvement in sales over the course of the year, and the growth rate in many markets in the region exceeded even our relatively bullish expectations (see 'Regional Sales Set To Grow On Pent-Up Demand', January 23).
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It remains BMI's core view that the regional market will resurge in 2014 on the back of pent-up demand from several years of sustained declines. In many markets, sales volumes remain far below their pre-global financial crisis peak, and we expect this to remain the case for some time to come. Indeed, regional sales volumes are likely to remain relatively low for some time and this is likely to affect companies' profitability in Europe.
Passenger car sales in the Czech Republic increased 13% y-o-y in January, to 13,638 units. BMI forecasts 3% growth in this segment over the year as broader measures of consumer sentiment continue to improve. Low base effects from H113 are likely to buoy the growth rate in the first half of the year.
Czech household consumption remained relatively weak throughout 2013 as government austerity measures eroded disposable income and kept unemployment high. These weak dynamics weighed on the passenger car segment, with sales dropping 5.3% over the year.
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