Pre-drive: Daewoo blamed for price slump
By : Magdalena Wierzchowska
The price of used cars dropped sharply during the past few months, with many dealers blaming the market slump on Daewoo's collapse.
According to Euro Tax, a company that sets average prices for used cars in Poland, fourth-quarter figures are much lower than normal for this time of year, especially for Daewoo models.
The company said that average prices are predicted to drop by 5-8% in December, while prices for some Daewoo models could fall by up to 20%. The company said the usual price drop for a used car is about 2-3% each month.
Grzegorz Sajdak, a used car specialist at Volvo, blamed Daewoo for the larger than usual fall in secondhand car prices. Car buyers have reacted nervously to the announcement of Daewoo's bankruptcy, even though the government and company have assured buyers that whatever happens in Korea will not affect Daewoo in Poland. Sajdak said most customers are worried that they won't be able to find spare parts. "There's a panic on the market that the company (Daewoo) will simply cease to exist," he said.
Robert Kolodziej, co-owner of Auto Karolina, a Slupsk-based used car dealership, said that although he hadn't noticed a general panic on the market, more Daewoo cars were waiting to be sold on his lot. Before news of the bankruptcy, he said, someone would ask him to help sell their Daewoo every three weeks. But now he has five to seven Daewoo owners trying to sell each week.
In a knock-on effect, the drop in prices of Daewoo models has triggered a fall in prices of other used cars, Sajdak said. "I had to lower prices for (used) cars that are in the same price range," he said.
At the start of 2000, 9.2 million cars were in operation on Polish roads and about 700,000 of those were Daewoo models, according to Samar, an automotive research company. If the prices of hundreds of thousands of cars become cheaper so quickly, there has to be an effect on the market, Sajdak said.
But Edyta Wasiluk, head of marketing and research at Euro Tax, said Daewoo's problems are not to blame for the falling prices. "I haven't found that Daewoo has had a bad influence on the market," she said, adding that the dip in prices resulted from the general decline of demand for used cars. She said September and October sales were 30% lower than in the same period last year. October prices began to fall rapidly and price tags for used cars had to be changed on a weekly basis rather than the usual once a month, Wasiluk said.
