More bad news for Polish automakers

Will the lower price of car imports give Polish consumers more choices?
By : Robert Wylot

   Two reports released last week signaled the end of the Polish auto industry's domination in domestic auto sales.

   On Tuesday, the Economy Ministry announced that there would no longer be import duties on vehicles from the European Union (EU) as of Jan. 1, 2002. And market research firm Samar (http://www.samar.pl) released a report showing that the sales margin between imported and domestically made cars grew even wider in July to 75% – or for every 11 cars sold in Poland, seven were imported and four were produced domestically.

   "A chance for importers is emerging," said Jacek Kucza, sales director at SŠkoda Polska. "I expect a further decline in sales of local manufacturers."

   Samar reported that Polish automakers sold only 9,420 passenger cars in July, a 24% drop from 12,455 cars sold in June. The July figure is even more alarming when compared to the 27,480 autos sold in the same month last year.

   Conversely, importers sold 16,546 passenger vehicles in July, more than an 11% increase from the same month last year.

   Of the eight biggest auto retailers in Poland, the three Polish-produced makes of Fiat, Daewoo and Opel saw their sales fall during the last 12 months by 38%, 59% and 37%, respectively.

   In effect, the 76% gap between imports and local production in July deepened the trend, which began in March, when the scales were first tipped in favor of importers.

   The gradual reduction of duties on EU-made vehicles (the standard duty rate is now 5%) is perhaps the greatest contributor to the current change in market structure.

   "It (elimination of duties) will make imported cars even more attractive," said Wojciech Drzewiecki, owner of Samar.

   Importers agree.

   "It will definitely help us," said Andrzej Pomaranski of GM Polska's press office. According to Pomaranski, imported cars sales will rise as their prices continue to drop due to reduced duties.

   At the same time, importers such as Pomaranski see a benefit to the increased sale of imported cars, even if it means fewer sales for Polish producers.

   "It can move the market up due to lower car prices – the prices will become more tolerable," said Pomaranski, who added that the lower price of imports will also give Polish consumers more choices.