Gov't stumped overcar market slump
In the aftermath of October's continued downward spiral in new car sales, the government is still scrambling to find a way to resolve the crisis, according to an October report by automotive research firm Samar.
More than 400,000 cars were sold in the first 10 months of the year 20.4% less than in the same period last year, according to Samar. In October, more than 32,000 cars were sold, which is 36% less than in the same month last year. "Everything indicates that ... the decline (in 2000) will be approximately 22-23%," said Wojciech Drzewiecki, head of Samar.
Industry sources blame escalating interest rates, higher insurance costs and fuel price hikes. Excise duties have contributed, trebling to 6% this year from 2% in 1999.
In an attempt to come up with an industry rescue plan last month, Deputy Economy Minister Edward Nowak said one way to make new cars more affordable would be to lower the excise tax. But the Finance Ministry, which has been criticized by the car industry for increasing the tax twice this year, shot down Nowak's suggestion after the draft budget was announced two weeks ago. The government still hasn't agreed on any other proposal in Nowak's rescue plan, which posited a possible limitation on imports of second-hand cars.
Domestic car manufacturers suffered the biggest hit as sales of cars produced in Polish factories sank 33% while sales of imports grew by 16% compared to the first 10 months of 1999, Samar said. Daewoo was the biggest loser, selling 32.6% fewer cars than in the corresponding period last year. Not far behind were Ford and General Motors, both of which saw sales drops of 28% so far this year.
