Car sales breakdown

   Car sales finally dropped to the other side of the growth curve in 2000 after five years of explosive growth.

   By November 2000, sales had plunged 20.4% compared to the same period the previous year. Predictions for the full year are even more pessimistic, with sales expected to drop to 23% compared to 1999, said Wojciech Drzewiecki, head of automotive research firm Samar.

   Ballooning oil prices are blamed for much of the softening demand – fuel prices rose an average 20% last year. Poles also saw the cost of maintaining their autos and insurance rates rise.

   Meanwhile, the government hiked the excise tax charged on cars from 2% to 6% and auto buyers also faced high interest rates on car loans, prompted by higher inflation, which further depressed demand.

   That pushed buyers to look for lower-priced autos, and many turned to used cars from Western Europe. By November, the number of used cars imported into Poland had doubled since the same period last year to reach 200,000. By comparison, Poles bought 420,000 new cars, Drzewiecki said.

   Daewoo, the nation's second-largest car manufacturer, saw one of the biggest slowdowns last year. Sales of Daewoo cars fell 35% in the first 10 months of the year compared to last year, according to Samar. The Korean automobile company hit the headlines this year, first as the U.S.' Ford withdrew in September from negotiations to take over Daewoo Motor, and later in November after the Korean company's creditors declared it bankrupt. Although the Polish government and the company itself repeatedly stated the company's Polish operations were not threatened, car buyers were concerned about spare parts supplies for the troubled brand and turned away from the automaker.

   To counter the drop in the car market's fortunes, the government put together a committee headed by Deputy Economy Minister Edward Nowak to examine what measures could be taken. Ways of limiting imports of secondhand cars were among the most important issues addressed by the committee.

   "(Without the government's help) the breakdown may turn into a catastrophe," Drzewiecki said.